Capitol Hill seems to be taking up the pro-consumer fight on two fronts this week with the extension and expansion of the Home Buyer Tax Credit and the sped-up start date of the Credit Cardholder’s Bill of Rights. Today, Obama officially signed off on the Homebuyer Tax Credit extension, which will extend the original November 30, 2009 deadline to April 30, 2010 and also opens up a $6,500 tax credit to eligible repeat buyers. On the frontlines of credit card reform, the proposed measure to speed up the Credit Cardholder’s Bill of Rights, from its original February 2010 date to December 1, 2009 was signed off by the House and is now awaiting Senate approval.

The passing of the revised Homebuyer Tax Credit, coupled with mortgage rates dropping below 5% again for the first time in 4 weeks, has many politicians and analysts hoping for another boom in the housing market to last well into 2010.

As for the credit card reform, if approved, the earlier-than-expected December date would be “just in time for the holidays,” when consumers are likely to more heavily rely on credit cards and could most benefit from the restrictions the reforms will place on the price-gouging practices of the credit industry. Cardholders and lawmakers in support of the proposal complain that since the passage of the Act in May, credit card companies have been abusing the grace period as a last ditch effort to raise interest rates, change card terms, add fees, lower credit limits, and even close accounts in order to recoup losses that the coming regulations will cost them. The reform is needed to help protect consumers by “locking a ban on interest rate hikes on existing balances, and tricks that have kept far too many consumers trapped in a never-ending cycle of debt,” reports CNNMoney.

On the other hand, credit card issuers have contested that the expedited start date would ultimately hurt the entire industry. Making the reforms effective a full two months sooner than planned won’t give their systems enough time, issuers argue, to get acclimated to the new regulations, and they have even gone so far as to defend the recent interest rate hikes—some as high as 30%–as fair considering the current state of the economy. Another lawmaker defended the measure, saying, “They have retained the right unilaterally and retroactively to raise the interest rate on what you already owe them. It is the single unfairest (sic) economic transaction I can think of that doesn’t involve a pistol!”

The CARD Act’s major provisions that will affect cardholders includes prohibiting arbitrary rate increases on existing card balances, requiring customer permission to opt into the ability to overdraw on accounts, and the “reasonable and proportional” penalty fees that require issuers to review all interest rates and reduce it where warranted. The measure awaits the Senate’s vote and Obama’s signature to become law.

The consumer protections and consumer incentives of these two key pieces of legislation are under hot debate as to whether the stimulus measures will be effective enough to spark sustainable activity in the struggling economy.

At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!

The bigger and better extended Home Buyer Tax Credit cleared both the House and Senate vote this week, and now sits on President Obama’s desk expecting to be signed and approved today. As soon as pen hits paper, the law will go into effect and ensure that the original $8,000 tax credit is extended to April 30 plus qualified repeat buyers can take advantage of a new $6,500 credit. It could be a stabilizing force for the crippled housing market, or it could be a band-aid that won’t last long. Read ahead for more opinions and perspectives on what new measures Uncle Sam is taking to cool off the heat of recession.

Credit Karma News

• Money Matters: when ‘free’ isn’t free from Keloland Television.
• The Today Show mentions CK in their Wednesday morning segment!
• The New York Times puts in a good word about CK in, “A Free Credit Score Followed by a Monthly Bill.”

Home & Mortgage News

• 6 signs your home will increase in value straight from SmartMoney.
• DebtKid asks, if money = freedom, why buy a home?
• The New York Times reports on fraud watch for homeowners.
• Good news! Mortgage applications rose 8.2% last week reports MarketWatch.
• More good news! Mortgage rates fall below 5% reports The Oakland Tribune.
• WiseBread gives fun tips on how to make money from what you could find in your attic.
• Deadline for home tax credit extended writes The Money Times.
• Moolanomy throws in its two cents– Why the first time home buyer credit is terrible for the economy.
• The Baltimore Sun’s blog has a few points to make about the expanded home buyer tax credit.

Here’s a glance at current mortgage rates to keep you up-to-date. The table shows the overnight average interest rate for two of the most common mortgage loan types (keep in mind, refinance rates typically vary from purchase rates listed below). Happy house hunting!

Debt is the new four letter word to avoid. Everyone, from Uncle Sam to the average American, is taking action to get out of the red: Bloomberg reports that the U.S Treasury Department is selling a whopping $81 billion of long-term debt next week to steer away from the country’s legal debt limit of $12.1 trillion; and Philly.com reports that Americans have been buying less stuff on credit cards, which helped drop the total U.S credit card debt peak of $975 billion in Fall 2008 to below $900 billion this summer.

Your card balance may not be in the billions, but are you taking steps to take care of your credit and eliminate your debt? This week’s roundup is especially for you to start taking steps to get out of the red too.

Credit Card News

• Thinking about canceling your card? Before you do, read The Wall Street Journal’s article, “Credit cards: break up or make up?“.
• Is it possible to live without credit cards?, FiveCentNickel asks.
• If you are shopping for a credit card, do your homework first with The Boston Globe.
• Reduce Debt Faster shares 3 ways to lower credit card payments.
• Prepaid credit cards gaining favor reports The Salt Lake Tribune.
• Study finds prepaid cards less expensive than debit cards from banks blogs Almost Frugal.
• The BBC looks into what’s in store for the future of credit cards?
• Credit card debt elimination guide @ Clear Choice Credit Cards.
• The Digerati Life looks at how to opt out of interest rate increases.

Debt News

• Cash Money Life asks an important question: Do you know how much interest you are paying each month?
• A fun, alternative approach from Five Cent Nickel: Use weight loss strategies to get out of debt.
• Don’t wait until January to think about budgeting Being Frugal warns!
• Good debt vs bad debt: isn’t it all bad? Your Money Relationship answers the burning question.
• Gather Little By Little recommends using your emergency fund to pay off your debt.

Have you ever been charged a $39 fee for overdrawing $3 on your debit card for a cup of coffee? Ridiculous, right? Congress thinks so too, and is aiming to do something about it.

Overdraft fees hit consumers hard last year as lenders raked in $24 billion, a 35% increase from two years ago reports the St. Louis Business Journal, which makes overdraft charges the banking industry’s single largest driver of consumer fee income. Now, Congress is siding with consumer complaints that banks and credit unions’ are taking advantage of customers with outrageous overdraft fees and less-than-full disclosure about their overdraft protection programs, and is proposing industry-wide limitations on overdraft practices.

Complaints Turn Into Changes

Debit cards—once the safe alternative to credit cards—is becoming a debt trap for consumers. Right now, banks and credit unions often automatically enroll customers in their most expensive overdraft protection program—up to $39 every time you overdraw your account. Like the above example of incurring a $39 charge for overdrawing $3, overdraft fees can often be disproportionate to the actual overdraft purchase so you are penalized an outrageous fee for a tiny infraction. Banks have also been accused of squeezing as much money out of customers as possible by rearranging the way transactions clear so you get charged overdraft on bigger ticket items, or as many as 9 times in a single day.

To reform other consumer complaints against these practices, some of Congress’ proposed changes include:

• Issuers must get customer’s permission to enroll them in an overdraft protection program, and the option to opt out of it
• Must notify customers that they are overdrawing on their account, and must warn them before any overdraft fee is imposed so they have the opportunity to cancel a charge
• Capping the number of overdraft fees consumers can be charged to once a month and six a year, after which purchases would just be denied
• Require issuers to have “reasonable and proportional” overdraft policies in which charges are proportional to the cost of processing the overdraft
• Prohibit issuers from manipulating the order in which transactions clear to create more charges

On the other side of the argument, banks and credit unions claim that it’s a courtesy to customers to provide overdraft protection to save them from embarrassment or inconvenience of a rejected charge or a bounced check. To that, one Congressman in favor of reform retorted, “Don’t do people favors without asking them.” The proposed changes are still being weighed in Congress as to how much more regulation—on top of the changes some issuers have taken upon themselves already—can be tolerably placed upon big banks. Banks and credit unions are strongly opposing the legislation, arguing that it would lead to higher fees for all customers, such as returned check charges.

Next Steps

Some banks have already reformed their overdraft policies in response to public heat. Bank of America will no longer charge fees if customers overdraw less than $10, Chase and Wells Fargo have cancelled fees for accounts overdrawn by less than $5, and Chase also promises not to charge more than 3 overdraft fees a day (down from a previous limit of 6). But you can protect yourself too. Consumers can take it upon themselves to be more responsible about not overspending, keeping track of expenses, and being aware of your own bank’s overdraft policies. If you want more information, check out How to Avoid Being Charged Overdraft Fees for extra tips.

At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!

Prospective homebuyers may no longer need to rush to open houses or speed through paperwork—senators have hammered out a plan to extend the popular First Time Homebuyer Tax Credit past the November deadline, plus offer a reduced tax credit to repeat homebuyers who qualify. While lawmakers have figured out the bulk of the tax credit deal, it still awaits approval from the entire Senate and the House before it becomes law.

Despite recent allegations of homebuyers fraudulently claiming the $8,000 tax credit and criticisms that the extended tax credit would be unnecessary spending of stimulus funds, renewed life for the tax credit appears very popular among legislators. The expanded tax credit plan would accept contracts until the end of April 2010 and must be closed before July 1. In addition to the potential $8,000 tax credit for new home buyers, the new tax credit would also provide up to $6,500 credit for repeat homebuyers who have lived in their home for at least five consecutive years and are looking to move. Repeat homebuyers qualify if they make less than $125,000 a year for individuals and $225,000 a year for couples.

“This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” Treasury Secretary Timothy Geithner said in a statement to MarketWatch.

The extended credit could further prop up the housing market because many more homebuyers can benefit from the tax credit than before. Home sales rebounded to the highest level in two years with a near 10% increase in September—we could see these figures magnify in the coming months to get the housing market back on its feet.

However, more recent home sale dips have stalled signs of recovery and suggests that the market is slowing down as the current tax credit nears its November deadline. Legislators are hoping that the new extension may be enough of a jumpstart to pick-up home sales, get home values increasing, and properties hot enough to get the market booming again. Like putting in a more gas until the engine gets up and running by itself, supporters insist that it’s the bigger boost needed to keep the economy revving again. On the other hand, these temporary government stimulus measures can’t prop up the economy forever.

At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!

Will your credit score be a trick or treat for you this Halloween? Are rising mortgage rates spooking you out of the new home market and back into your apartment? Here are some good reads from the headlines and blogosphere because personal finance shouldn’t be such a scary experience.

Home & Mortgage News

• Surprise drop in new home sales CNN money reports.
• Money Under 30 sets it straight: Pre-qualification vs pre-approval: whats the difference?
• The New York Times follows homeowners walking away.
• Frugal Dad dives into Q&A on the new rules for mortgages.
• Do you know about the ‘double bubble’? MSNBC explains more on the current real estate trouble.
• How to buy a home you can afford blogs Free Money Finance.
• The Wall Street Journal asks, is an expanded home buyer tax credit a good deal?

Credit Karma News

• The Collier Citizen mentions CK in, “Tracking a Credit Score”.
• Lesson learned: Now you can get credit scores free! @ JournalStar.com.
• Thanks to San Francisco Chronicle for listing CK in Money-saving sites to check out, Part 2.

Move over Halloween and holiday stores; mainstream names from Gucci to Toys R Us might be the new seasonal retailers popping up at your local mall for a limited time only.

They are called pop-up stores or shops because these temporary retail operations literally pop up and disappear after a short amount of time. While Halloween costume shops and Christmas décor stores have been doing this for years, nowadays big-name retailers as well as niche retailers are filling mall vacancies for a few days or weeks instead of opting for long-term lease commitments.

And who wouldn’t blame trendy retailers and brands like Urban Outfitters, Target’s hip Isaac Mizrahi brand, and even luxury brands like Gucci for trying out the “get it while you still can” approach in the midst of this recession? It’s a creative way to fill up mall vacancies, get rent at a fraction of the price, to take advantage of the deflating commercial real estate market, to generate buzz around new products and brands, and set up and close down without much fuss. It’s also been effective in broadening market opportunities for larger department stores that need a fresh, new outlet: Toys R Us has opened Holiday Express locations in upscale malls that were previously off limits, and JC Penny is testing out interactive mall pop-ups that sends text messages to cell phones when shoppers get within 35 feet.

But smaller boutique names are getting in on the “now you see it, now you don’t” model too. For lesser-known brands, pop-up shops is becoming an ideal way to test our new lines without too much commitment, and an edgy, creative way to meet consumers. Lightning Bolt, a surf shop meets lounge bar, hosts a pop-up shop on Saturdays in New York City where you can check out its surf collections while sipping cocktails and grooving to a live DJ. Talk about cool, hip, and oh-so-limited.

In these frugal times, these quickie retail stores are a hot and recession-friendly bandwagon for retailers and landlords to happily jump on-board. A 5 day or 5 week lease is a lot less risky and easier to sign off than a 5 year lease, plus businesses can now strategically plan their retail operation quickly and with less fuss and complications, knowing they have a limited timeframe to operate.

This is a win-win-win situation for retailer, landlord, and shoppers too. I wouldn’t be surprised to see pop-up stores coloring bleak mall landscapes hit hard by the recession. With something fresh and new to offer, these pop-ups are helping shoppers get back in the saddle and back into malls for the holiday shopping season. But get in line while you still can; the next pop-up shop might disappear faster than you can say, “I want that!”

At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!

Here’s something fun to take your mind off the long work week: a little bit of Jaywalking on Money Matters on All Financial Matters. While you’re sharing a few laughs with co-workers, make sure you browse the rest of these links so you don’t end up like those Jaywalking victims. Enjoy!

Credit Cards

• The Chicage Tribune announces that those annoying gift card dormancy charges are now canceled.
• Credit cards are indeed an indulgence confesses Money Ning.
• Market Watch reports that Congress to take aim at overdraft fee limits.
• Check out Money Under 30’s two-part series, “Radically re-thinking credit cards“.
• You won’t believe what the latest bank fee is for: paying off credit card on time every month, USA Today reports.
• Mighty Bargain Hunter responds to the article above, and takes a different side — anti-credit card legislation hurts just about everyone.
• Credit cards to charge good behavior fees blogs Frugal Dad.

Debt

• Liz Weston answers a question on ways to pay off costly debt.
• Graduation present or pay off debt? wonders Clever Dude.
• CNN Money reports that unemployment in cities eases in September.
• Did you know that even good debt can be bad, blogs Moolanomy.
• Have good credit? The Digerati Life suggests best debt consolidation loans for you.
• Not my debt - what do I do? PT Money solves this dilemma.

There is a mini-boom in the housing market as September sales, propped up by homebuyers taking advantage of the $8,000 Tax Credit and record-low mortgage rates, beat Wall Street forecasts. But it’s difficult to say outright that the current housing market has made it through the storm of foreclosures, plummeting prices, and deserted markets we’re become familiar with in the last few years. Despite hiccups in the housing market, can we still remain upbeat? Here’s the latest news on what’s happening on the housing front.

On the brighter side

• Last September, home sales rebounded to the highest level in two years with a 9.4 percent increase, reports Reuters. These figures are better than Wall Street expected and overall show a 24 percent increase in home sales since hitting rock-bottom in January. Largely spurred by the tax credit’s looming deadline, sales are increasing also because of greater affordability and an improving economic outlook.
• Low mortgage rates have been maintaining at or below 5% for about a month now, have spurned homeowners to look into new-home purchasing and also refinancing, which was at a 38% demand increase shortly after the rates dropped below 5% in early October.
• Another positive sign: the inventory for unsold homes fell 8 percent to 3.6 million nationwide, which is at the lowest level since March 2007. Home sales are still 23 percent off-pace from the its peak 4 years ago, but if homebuyers keep biting, a decreasing pool of homes on the market coupled with the current increasing demand of home sales will foster a more robust market ripe with plump home values and active sales.
• The First-Time Homebuyer’s Tax Credit has contributed vastly to the pick-up in home sales leading up to its deadline date on November 30th, 2009. Congressional talks about extending the tax credit till June next year and expanding it to encompass all homebuyers is already hotly contested. Realtors and homebuilders state that extending the credit is what the market needs to boost prices and sales to finally get it back on track, while others argue that it will be a $16.7 billion dollar expense that will only be a band-aid on a larger housing crisis.

Yellow flags

• The housing market is still underperforming as home prices continue to drag due to foreclosures and short sales. The median price for a home in September was $174,900, down 9 percent since last year, and signals an influx in distressed properties which accounted for nearly 30% of sales in September. [But back on the brighter side, these bargain-priced foreclosure sales have contributed to the big boost in home sales.]
• Unemployment, now at 9.8 percent nationwide, is expected to hit 10.5 percent next year. More unemployment leads to more foreclosures as people fall behind on mortgages. So expect the housing market to drop further if unemployment rises.
• Congress is currently investigating questions that a possible 100,000 claims out of the 1.5 million submitted applications for the tax credit may have been fraudulent. People who hadn’t bought a home, already owned a home, were illegal immigrants, or were under the age of 18 committed fraud in trying to take advantage of the potential $8,000 rebate; one taxpayer to claim the tax credit was only 4 years old, the Associated Press reports. This could definitely compromise the possible extension or expansion of the tax credit.

Looking Ahead

There are signs of recovery in the housing market, but its spotty nationwide. The strongest market is the West with a high sales climb of 13%, while the South and Midwest have a lower rate of home sales and lower median prices. In general, metropolitan areas like Los Angeles and San Francisco are faring better in terms of home sales and home values than rural areas. So while positive trends may be popping up in the home market, it’s happening to various areas to different degrees. To pull the entire home market back up, it’s going to take the solid momentum of sales in all segments of the overcrowded market to jumpstart real and long-term economic growth.

TGIF and thank goodness mortgage loan rates are still at or below 5%! It’s another good house-hunting weekend, but headlines remind us to be weary of homebuyer hiccups in our uncertain home market. Plus, Credit Karma trends have been all over the blogosphere and news. Here’s today’s scoop:

Home & Mortgage

• MarketWatch reports on mountains of modifications.
• Refinancing: when is it worth it?, MSN Money asks.
• Kiplinger writes that there are more troubles for housing: mounting foreclosures.
• Saving to Invest blogs on 10 deadly mistakes buyers make when purchasing a home and how to avoid them.
• 7 red flags for home buyers and more advice from Kiplinger.
• Doughroller brings you a buyer’s guide to rent to own homes.
• The Associated Press delivers some good news: home sales rise 9.4 percent in Sept.

Credit Karma in the News

• Gmail users have higher credit scores than yahoo mail users blogs Mashable.
• MoneyWatch answers the questions, Why should you have to pay for your credit score?
• Finanacial start-ups form “coalition for new credit models” reports Reuters.
• WalletPop takes an interesting look at what your e-mail address says about your credit score.
• Financial start-ups form lobby group @ Finextra.com.