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Dinna

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Hello, Student LoanDown readers! I know it's been a while since you've heard from me on the blog. I've been pretty busy this past year working on a project related to new regulations for the credit card industry.

You might've heard about the Credit Card Accountability, Responsibility and Disclosure (CARD) Act which was signed into law by President Obama  in May of 2009. The CARD Act outlines a series of new regulations on open-ended consumer credit accounts that are meant to strengthen consumer protection in the credit industry.

Why should you care? Well, there are specific regulations that apply to consumers under the age of 21. These regulations apply to any financial services company that issues open ended credit card accounts. Here's what you should know:

• If you are applying for open-ended credit (such as a credit card) and are under 21 years old, you must show proof that you can independently repay your debt. Otherwise, you'll need a creditworthy co-applicant who is 21 years or older on the account with you.
• If you are under 21 with a joint accountholder on your credit card account, the joint accountholder who is 21 or older must provide written authorization for any credit line increase that you request.
• Giving college students "inducements" or giveaways to apply for a credit card is not allowed. This applies to all students attending an institution of higher learning, regardless of their age.
• If you are under 21, you must submit a written application that contains your signature and the signature of your co-applicant (if applicable).

As I mentioned, the CARD Act has many other new regulations meant to protect credit card consumers. If you want to learn more, head over to the Federal Reserve website.

If you are a Wells Fargo credit cardholder, you should've received a notice in December or January outlining how Wells Fargo is complying with the CARD Act and what it means for you. And if you have any specific questions, please let us know!

Caroline

We all make mistakes. But money mistakes come with a price.

Recently Wells Fargo made a change to its overdraft charge policy that makes those mistakes a little easier to swallow!

In the near future (the final date’s still TBD), your account will not be assessed overdraft fees if you become overdrawn by $5 or less. Also, no more than four overdraft charges will be charged per day.

Also, in the coming months, customers who want to opt out of overdraft coverage will have that option — you’ll be able to specify that you don't want your transactions authorized or paid into overdraft if you don't have funds to cover the transaction.

That's all good news, but more importantly, how can you avoid overdrawing your bank account in the first place? Just a few simple ideas:

• Bank online. Get yourself set up for online banking, so you can view your account any time. You can see pending transactions and easily transfer balances from one account to another, which can help you avoid overdrafts.
• Sign up for overdraft protection. At Wells Fargo, enrollment in overdraft protection is free, and can dramatically reduce the fees you're charged for overdrawing your account.
• Sign up for mobile banking. Right now Wells Fargo is offering this service for free. It allows you to keep track of your account, like check balances, review recent activity, and transfer funds — all from your mobile phone.
• Go low-tech. Although many online tools are helpful, you don't have to be high-tech to keep good track of your bank account. Use a good old-fashioned check register to record all your account activity: check card purchases, deposits, ATM withdrawals, etc. You can also use this as a backup, even if you're banking online.

So tell us: How do you keep track of your bank account?

UPDATE: Oops, we jumped the gun on our original post! We recently learned these changes to our overdraft policies are a work in progress, which means they’re not yet available. We’ve updated our post to reflect that! We apologize for any confusion this may have caused and will let you know when those services are up and running.

Barbara

Staci is always saying she needs 15% more or less of something. Like when she can't find the movie she wants through the Redbox, she needs 15% more of that movie in the Redbox. Or when Pie Elizabeth is being particularly barky, she needs 15% less barking.

Once I asked her why she uses 15, to which she responded "Fifteen is my favorite percent."

Right now, nine is my favorite percent. It's the percent of my goal I have saved on two savings accounts. I guess technically my favorite percent in this respect would be 100, but for now, I'm happy to see nines.

If you're saving through Wells Fargo, you can set up My Savings Plan^SM to monitor your progress, too. I've established a couple savings accounts with specific savings goals — one for new windows on my house and the other for my ongoing saga of saving for a new car.

I teeter-totter back and forth as to whether seeing my savings percentage — or accounts for that matter — helps or hurts me. Seeing my progress from time to time can help me stay motivated to maintain my current contributions and kick in an extra couple bucks when I am able.

However, seeing that the money is out there just waiting for me can test my patience. Sometimes I start thinking about what debts I could be paying off with the money or how easy it'd be to transfer a couple dollars out of the account for something smaller I need/want (mostly want).

Here's the compromise I made that seems to be working so far. Some of my accounts are visible through online banking and some are not. My emergency fund, which I want to keep growing and never take from unless it's truly an emergency, is one of the accounts that's invisible. The account is funded through direct deposit of my paycheck, so everything is automatic and I don't see the money.

Other accounts, like the window and car goals, are visible. For these accounts, I've found that knowing the specific amount of the specific goal is helpful to keep those savings goals trucking. In addition to automatic transfers, I tend to add more money when I can. Right now I'm thinking about depositing a few more dollars to get the window goal up to 10%. Double digits!

Does having a reminder of how far along you are help your savings goals? Tell us about what savings tricks you have.

Barbara

When I opened my inbox today, I found a message from the bank. My automatic transfer had gone through, adding another chunk of change to my savings account.

Recently, I dedicated one of my savings accounts for a specific goal: new windows for my house. When I purchased the house more than two years ago (wow, time flies!), I knew the windows would need to be replaced eventually. My house has been around a while and still has its original windows...from the 1960s. And after estimating the cost to replace them, I decided it'd be better to start saving now, even if they'll last a few more seasons.

Saving for a specific goal has really helped my savings stay in savings. Plus, I can track my progress and set up recurring transfers to help me keep the right amount going in each month (I just divided the total amount I need by the months I have to get there, and make sure at least that amount goes into savings automatically each month).

Thinking about my own savings goal got me wondering: What are all of you saving for?

For me, it was important to find a balance between saving for the things I needed and still focusing on repaying my debt. Saving versus paying off debt  is, in my opinion, something you need to decide for yourself. Each person is different — everyone saves for different goals and deals with different debts.

Have you been managing saving while paying off debt? If so, tell us: How did you find a good balance between the two?

Delenie

Like many college students, I fall under the category of being an uncontrollable spender when it comes to wardrobe enhancements and fine dining. For me, even though it's important to look trendy and live an eventful life, it's just as important to spend wisely and save so my summer income can fund my full-time student living expenses during the school year.

That's why I'm making an effort to be more careful about tracking my own expenses. Recently, I took my friend's advice and opened an account at Mint.com  that directly links to my checking account. This tool helps me create a realistic budget, while comparing some of my spending habits  to the average American. Eye-opening!

With this budget in mind, I'm thinking about how to cut back on certain expenses and limiting my spending to the items I truly need. Here are some of my ideas:

• Making more meals at home  instead of eating out three times a day
• Revamping my wardrobe by accessorizing  instead of shopping
• Going vintage
• Going online for discounts  prior to making any big purchases
• Signing up for Netflix  instead of going to the movies
• Watching TV shows online instead of paying for cable
• Adjusting my text messaging plan
• Hiking or going jogging  with friends instead of paying for a monthly gym membership
• Giving up a videogame addiction and finding a private tutoring job
• Getting ink cartridges refilled instead of buying brand new ones
• Scanning classifieds for used furniture or using Craigslist  instead of going to fancy stores like Crate & Barrel  and Pottery Barn 
• Using generic products unless brand names are an absolute must

So far, I've managed the accessorizing.

Have any smart spending/saving tips that you'd like to share? Let us know!

Staci

Editor's note: Chelsea McDermott-Lenocio is a guest blogger from our Card Services & Consumer Lending division, where she is a product manager. When she's not out enjoying time in the sun or fishing, you can catch Chelsea shopping for stealer deals on shoes and jewelry at local boutiques.

OK, so paper or plastic might not be the question on your mind when you whip out your wallet at the grocery store (or at any store for that matter), but you may find yourself pulling out your debit card (aka check card) more often than writing a check or paying with cash.

With all the great features of this simple piece of plastic, there's no wonder why the popularity with the debit card has increased since the 1980s. 

Not only does a debit card offer flexibility, but it's also a convenient way to access the money in your account. It can be used to make deposits, withdraw cash, transfer funds between your accounts and perform other transactions at the ATM (Automated Teller Machine).

When you use your debit card, all purchases or other transaction amounts are deducted from the primary deposit account that is linked to your card.

And as you probably know, there are two ways to pay for your cup of coffee or for your book purchases  using your debit card: You can either choose to use your Personal Identification Number  (PIN) or select "credit" and sign the receipt.

I can't even remember how long I've been using my debit card (more than 10 years for sure). But I can tell you that I find myself pressing "credit" habitually (unless the merchant only accepts PIN for payment) because I can't stop thinking about all the Green Rewards and travel arrangements — like airfare, hotel or rental car — that I'll reap once I redeem my rewards points through the optional Wells Fargo Rewards® program!

So what are the real differences between paying with cash and using a debit card, you may ask? Here's a simple breakdown to keep in mind:

So, what do you find yourself using the most, cash or debit card? What features of the card do you like the best?

Stay tuned as Chelsea explores other topics on how you can manage, protect and reward your everyday debit card spending. And if you have any questions or topics you'd like her to cover, let us know!

Rachel

A few years ago when I was a banker, a high school student came in looking for help. He was freaking out because he had overdrawn  his account again and his dad was going to take away his car. "You have to help me!" he pleaded.

Oh, to be in high school again and have the threat of your car being taken away. People, listen: Of all things to have your car taken away for, banking trouble should not be one of them. You got this. Here's what you can do.

1. Make sure you have overdraft protection set up. When you spend more than you have in your account and you have overdraft protection set up, money can be automatically transferred from your savings account or credit card to your checking account to cover whatever you bought. This transfer costs money but it's less than a full overdraft charge. But don't let it come to this. You still have to replenish your savings or pay off that charge to your credit card after the fact. Do what you can to prevent this from happening altogether.


2. Play a little money mind game with yourself. For most of us, if there is money in the account, we're going to spend it, right? And if you only have $5 left in your account until Friday and you really want that Red Bull , you are going to justify the purchase. Here's what I used to do: When I opened my checking account with $100, I considered my account at zero. I pretended that $100 = $0. That way I always had an emergency cushion. When I say pretended, I mean it. That $100 in my checking account was invisible to me. Very rarely did I let myself go below the $100 and when I did, it was usually for something "really important: the day before payday.


3. Set up a text message alert to send when you enter the danger zone. You can get a text you when your account gets down to a certain amount, whatever you designate.


4. When in doubt, send a text to check your balance. This way there is no guessing or assuming and you know exactly where you stand.


5. And of course, be sure you are logging in to online banking as often as you do Facebook.  Knowing what's up will help you stay out of trouble, at least with your bank account.

Barbara

OK, I know Kathy just talked about BudgetWatch, but because I believe it is an amazing tool, I just have to talk about it again and share my experience.

Now, over the years, I've employed numerous budgeting methods  — everything from a strictly cash-only system, to writing down each purchase in a notebook, to the Diet Coke® Savings Plan. But nothing stuck.

So when BudgetWatch became available, I went though the motions to create my budget. Couldn't hurt, right?

Well, much to my surprise, this method is sticking! Why? Here are just a couple things that make this method easier for me:

1. Location, location, location: If you go into Wells Fargo Online® Banking regularly (to check your funds, pay bills, monitor what has been posted to your account, etc.), it's only one more click to check how well you're adhering to your budget. For me, having to go out of my routine to keep track of my budget, like through an Excel spreadsheet or other program, was a huge deterrent to sticking with a budgeting system.


2. Automatic comparisons: One of the big things that can throw a budget off is not having a good picture of your spending habits when you create it. Sure it's great to say you want to spend just $150 on groceries each month, but that may not be realistic. BudgetWatch gives you a picture of what your spending has actually been. You can even automatically fill in your budget based on your average spending each month.


3. Fluid budgeting: We're getting to the end of the month, and I'm starting to see some red categories (meaning I've spent over the allotted amount). However, some of my categories have a surplus. It's easy to swap some budgeted funds from one category to another if needed to keep you in the black. Or you can just keep track of "what's left" (your money inflow v. money outflow) to make sure you don't spend more than you have.

And the proof is in the Jello® pudding  I packed for lunch! Earlier this week, Staci sent me an invitation for a group lunch. Unfortunately, my restaurant spending category has only a whopping $0.31 left. Now, what about moving some clams from other categories? Well, most of the extras are already earmarked for some home expenses (story forthcoming) for which I hadn't budgeted. So, instead I sent my lunch regrets and brown-bagged it. A small victory, but I'll take it.

Have you found a budgeting system you can stick to? Perhaps BudgetWatch?

Staci

Last week I was talking with a friend of mine who is still paying off his student loans from graduate school. Like he does with his car loan and his mortgage, he pays more than the minimum amount. The extra money goes toward the principal (the balance owed on the loan), which means he pays the loan off faster and with less interest . If this is something you can afford, I highly recommend it, especially since student loans don't have a prepayment penalty .

However, my friend's student loan servicer was recently purchased by another company, and now he's dealing with a different billing system.

Before, he used a loan coupon book  and mailed in his more-than-the-minimum payment every month. When he called the new company to ask about payment options, the representative looked at his account and said, "You're paid ahead through April, so you don't have to make any payments until then."

Then he asked for a bill, and the representative explained that he wouldn't be receiving one until his next payment was due — in April.

To be fair, I suppose most student loan companies aren't used to their customers inquiring about paying more and paying in advance!

What I recommended to my friend is that he set up a recurring automatic payment for his student loan through his checking account.

When he balked, I told him to think of automatic payments as an "electronic coupon book."  That way, he won't have to rely on receiving a bill — he can just take matters into his own hands. Plus, he'll be saving paper and stamps!

What works best for you to stay ahead — or at least on top of — your student loan payments?

Staci

On Sunday I went to the ATM, which I usually do in order to have some cash for the week. After I'd gotten cash, I went to put away my debit card and noticed that I had a check from my best friend Charlie to deposit. So I put my card back in the ATM, completed the deposit, took my receipt, and drove away.

Without my debit card.

Half an hour later — while in the grocery store checkout line — I opened my wallet and realized what I'd done. I paid for my groceries with the cash and flew back to the ATM to see if my card was still there.

It wasn't.

Panicked, I called the Wells Fargo Phone Bank to cancel the card. Fortunately there hadn't been any charges on it, but it was going to take five to seven business days to get a new one. Then I really panicked. How was I going to function for that long without my debit card?

For me, check writing has gone the way of the dinosaur . I'm lucky if I write one check per quarter, and that's usually only for some rare service that doesn't take online payments. But I don't think I'm alone — some new checking accounts no longer come with paper checks. And many retail establishments don't even take checks anymore.

Even if I have become overly dependent on my debit card (is there some sort of twelve-step program  for that?), for the next five to seven business days I will have to be creative, patient, and frugal — or resort to writing a check or two. Barbara would probably argue that this is a good lesson for me: forced thriftiness!

What payment methods do use most often? Are you as addicted to your debit card as I am?