Personal Banking E-Newsletter - November 2012

Understanding Medicare

Most adults become eligible for Medicare on the first day of the month they turn age 65. Whether you need to sign up, and how to go about doing so, depends on the type of coverage you select and whether you collect Social Security benefits prior to becoming eligible for Medicare.

Medicare Eligibility

If you have already started receiving Social Security benefits before your 65th birthday, you don't have to sign-up for Medicare Part A or Part B. Part A is basic hospital insurance; Part B helps to pay for medically necessary services such as doctor visits or outpatient care. You automatically become eligible on the first day of the month you turn age 65. Premiums for Part B (there is no premium for Part A) will be deducted automatically from your Social Security check.

If you are not receiving Social Security benefits, you will be required to sign up for Part A and Part B. Contact your local Social Security office three months in advance of your 65th birthday to start the process.

If you still receive medical insurance from another provider (such as your employer or your spouse's employer), you can wait to sign up for Medicare. To avoid paying a higher premium, you will be required to enroll during the eight-month period that begins during the month your employment ends or the group health coverage ends, whichever is first. Note also that you may be assessed with higher premiums if your modified gross adjusted income is over $85,000 for single filers and $170,000 for married couples filing jointly.

Medicare Part C and Part D

Both Medicare Part C (Medicare Advantage) and Part D, which is prescription drug coverage, are provided by private insurers whose plans are approved by Medicare. You can information on these providers on the Medicare Web site (

You can sign up for both Part C and Part D when you first become eligible for Medicare. You can also sign up between January 1 and March 31 or between November 15 and December 31 each year. Even if you don't currently have many prescriptions, you may want to consider signing up for Part D as soon as you become eligible. If you wait and try to sign up during a subsequent enrollment period, you may be charged a late enrollment penalty and be forced to pay higher premiums.

Supplementing with Medigap

Many retirees supplement their Medicare coverage with Medigap plans, which are sold by private insurers. The state where you live may determine the type of plan available to you. It's important to note that these policies do not cover long-term care, vision care, dental care, hearing aids, eyeglasses, prescription drugs, and private-duty nursing. If you anticipate ongoing use of these services, you may need to obtain another form of insurance or pay out of pocket.

When you sign a contract for Medigap insurance, you usually permit the insurer to access your Medicare Part B claim information directly from Medicare and to bill your health care providers directly. In certain instances, Medigap providers will manage claims for Medicare Part A as well.

Your Rights as a Medigap Beneficiary

Medigap policies cover only one individual, which means that for couples, each partner needs to purchase a separate policy. The best time to purchase a Medigap policy is during the Medigap open enrollment period, which lasts for six months after you are both age 65 or older and enrolled in Medicare Part B. During this period, an insurer cannot refuse to sell you a Medigap policy or impose a surcharge because of your health status.

A standardized Medigap policy typically is guaranteed renewable, which means that, as long as you continue paying premiums, an insurer cannot use your health status as a rationale for cancelling the policy. If you were diagnosed or treated for a pre-existing medical condition within six months prior to a Medigap policy taking effect, an insurer can make you wait up to six months before providing coverage for the condition. In certain instances, if you had health insurance coverage during the six-month period before the Medigap policy takes effect, the waiting period may be eliminated or shortened.

© 2012 S&P Capital IQ Financial Communications. All rights reserved.

7 Ways Black Friday is Changing

That annual trip to the shopping mall the day after Thanksgiving is a tradition for many families, marking the official start of the holiday season.

But in recent years, the rules of Black Friday shopping have changed dramatically, turning this ritual on its head.

New hours, different types of sales and a bigger online focus allowed retailers to rack up a record $52.4 billion in sales last year, according to the National Retail Federation. However, that spending was spread over the course of the four-day weekend rather than on just Black Friday itself.

Indeed, while the term "Black Friday" was used to denote the point at which retailers begin to turn a profit (or inch out of the red and into the black,) analysts say these days it should probably be called Gray Friday, as it fades into a longer shopping spree with a flurry of separate promotions, Marshal Cohen, the chief industry analyst of consumer research firm NPD Group, points out.

However, analysts say, this day still offers the most dedicated shoppers a crack at a select group of rock-bottom "door-buster" deals that are unrivaled throughout the season.

Here are eight ways Black Friday has changed and what it means for shoppers this holiday season:

It’s no Leak

More retailers are now giving out their own ads. Years ago, Black Friday sales ads were leaked from retail and printing company employees. Now marketing executives have started giving them out ahead of time to Black Friday deal sites, news outlets and even social media followers in hopes of building buzz about their sales.

Wal-Mart, for instance, after years of sending threatening cease-and-desist letters to anyone leaking its Black Friday bargains, has in recent years given its ad to CNN and posted the deals early on its Facebook page.

The early exposure, the company realizes, puts it top of mind for consumers researching and planning their purchases ahead of time.

Some retailers are even beginning to advertise on Black Friday sites, in an attempt to get their ads noticed, says Brad Olson, who runs BlackFriday at

"That never happened five to six years ago," he says.

Less need to camp out as deals shift online

Probably the biggest change in Black Friday has been the steady migration of sales from brick-and-mortar stores to the Web.

While retailers want consumers to buy in stores -- because they tend to buy more there -- they can't afford to alienate online shoppers.

In years past, shoppers had to brave early-morning chills to snag most Black Friday bargains.

Website estimates that 70% of those bargains now can be found online for the same price or less as early as Wednesday of Thanksgiving week."The better deals are likely to sell out quickly," says Olson, "but I think consumers have a better chance to score the best deals online than they've ever had."

So unless you're after one of those half-price washer/dryer combos or a $200 42-inch LCD TV you could probably stay at home instead of lining up outside the store with your thermos.

More sales start Thanksgiving or very early Friday morning

In an effort to best their rivals -- and claim a greater share of holiday spending -- retailers have been opening up earlier and earlier.

While a 5 or 6 a.m. Friday start time used to be the norm, now shoppers may have to pull an all-nighter to land the best deals, says Michael Brim, an operator of deal site

Last year Wal-Mart started its sales at 10 p.m. on Thanksgiving Day (9 p.m. online), and Toys R Us opened its doors at 9 p.m. Staying up late after a big feast is hard enough. In some cases, shoppers had to stay at the store for hours to land deals across all departments or even come back early the next morning.

Black Friday isn't the best and only day for bargains

While sales on Black Friday continue to rise, "it has become less powerful and important," Cohen says, as shoppers spread out their purchases over a longer period, rather than filling much of their list in one bargain-filled day.

More chains offer secret, last-minute Black Friday deals online

Once most of the Black Friday ads have been published on sites across the Web, a second wave of discounting, not featured in ads, takes place. These Black Friday week "flash sales" allow retail chains -- especially discounters like Target, Best Buy, Amazon and Wal-Mart -- to match or better their rivals' published deals.

"A printed ad has to be designed, printed and delivered," Brim says. "An online sale can be created and launched in under an hour."

Amazon, for one, does a lot of its discounting on the fly, marking down prices on items during the entire week in response to others' bargains.

To find these last-minute sales, it pays to check deal sites, which update their sales information frequently.

More retailers are price-matching BF deals

Black Friday sales used to be the exception to most retailers' price-matching policies. Not anymore. Best Buy and Target said recently they would match Amazon and other online retailers on prices in an attempt to cut down on so-called "showrooming," where people inspect stores' merchandise before buying the item for less online.


When Kids Compromise Your Online Security

Is your teenager or grandchild putting your financial security at risk online? While it can be handy to have a tech-savvy younger person in the house, it also can make your financial and personal information less secure. The best and latest antivirus software won't help much if someone is downloading virus-laden computer games and fake iPad apps for "Fruit Ninja."

Kids often know the technology better, but they aren't necessarily more careful when they use it, experts say.

Privacy concerns also can be an issue. A 14-year-old might think nothing of posting on Facebook that his whole family is in Yosemite (hello, local burglars), or that his unemployed uncle was arrested for drunken driving (hello, potential employers). He also might be less concerned about identity theft or whether a crime syndicate will get his Social Security number.

The more computer users there are in your home, the greater the need to take precautions—regardless of their sophistication.

Antivirus Software

Since kids can be cavalier when it comes to downloading, parents need to secure extra-strong antivirus protection.

Several studies conducted by Consumers Union in recent years found a correlation between households with people under age 18 and a larger incidence of computer viruses and other malware. Some 14% of home networks were infected with malware in the second quarter, according to Kindsight Security Labs.

Many households have a computer with several users, or have wireless networks that all share the same router. This increases the risk that the computers will become infected with viruses, which can delete your files; adware, which triggers annoying pop-up windows; and spyware, which can track your keystrokes to steal your passwords, turn on a webcam remotely or cause other mischief.

Crucially, you need to keep your antivirus software up-to-date and set to run automatically. If you don't know whether your virus program is up-to-date, it probably isn't.

The Microsoft Safety & Security Center has a free security scan, as well as free antivirus and anti-spyware software. If you suspect your computer is infected, disconnect it immediately and get help from an expert.

The most secure option is to keep all your sensitive financial records and irreplaceable documents and photos on a separate computer that only you have access to, and which you connect to the Internet only while transacting business online.

Family Drill

Remind household members of the hazards of downloading apps without first checking them out, or clicking on links in emails supposedly from banks, phone carriers or other entities claiming there is a problem with your account. These are likely to be phishing schemes intended to capture your passwords and personal information.

Newer phishing schemes include emails supposedly from your Internet or email provider warning that you have run out of storage space and will lose your files unless you take action immediately.

Email phishing poses less of a problem for younger people, who generally prefer text over email. Nonetheless, they may be vulnerable to emails warning that their photo was posted on Facebook, and advising them to click on a link to see it or get rid of it.

Wireless Risks

With household members using multiple devices, it's almost certain they all are connected to the Internet by a single wireless router. If your router isn't secure, your computer isn't secure, either.

Make sure it is password-protected. Without a password, neighbors or someone sitting in a car parked near your home can piggyback on your wireless, which can eat up bandwidth and cause your Internet browsing to slow to a crawl.

And remember that your router is like your phone number: It is traceable to you, not the hacker using your connection to cover his tracks, nor someone using it to visit illicit sites.

Many people fail to change the default password on their wireless router. These are readily available on hacker sites, often listed by make and model. If you don't know whether your wireless system is password-protected, it probably isn't.


5 Ways to Repair Your Credit Scores

When it comes to cultivating a credit score, you've probably got the good-citizen routine down cold: You pay on time, try to wipe out the entire balance every month and never close too many accounts at once.

Beyond the basics, though, many consumers are still in the dark about what makes their credit scores go up and down.

"We have had so many people over the years who don't understand what goes into a credit score," says Dave Jones, the president of the Association of Independent Consumer Credit Counseling Agencies. "They just live with the old wives' tales."

Consumers understand that the credit utilization ratio -- the total amount of revolving credit someone uses in a month, compared with the amount of available credit the person has -- is a major factor in calculating a score.

But did you know that it's often calculated from the total on the statement date, not the due date? So even if you pay balances in full every month, a card issuer may report a balance. And that can hurt your credit scores.

Here are five ways you can use that bit of knowledge, along with some other expert know-how, to boost your credit ratings:

Pay bills before the statement date

Typically, the balance as of your last statement date is the balance that will be reported to the credit bureaus, says Barry Paperno, a consumer operations manager with, the consumer division of Fair Isaac, the company that created the FICO score. So if you pay most of the bill before the statement date, you can lower your utilization rate. And that can equal higher credit scores.

"How much you owe is 30% of your score, and the utilization ratio is a large part of that," says Paperno.

If you charge a balance every month but pay it off and can't understand why your scores aren't higher, it could be that your utilization ratio is what's depressing your scores, he says.

This might not work with every card. Some lenders don't use the balance on your statement date when they report to the credit bureaus. Instead, they select another day and report the card balance on that date instead.

Paperno's advice: Call your lender to ask when the balance gets reported.

Make multiple payments

Another way to lower the balance on your statement date is to make periodic payments throughout the month.

If you use a credit card throughout the week for everyday expenses and pay it off every Friday, you'll cut the amount of credit you're using at any one time. Check with your card issuer to learn how it handles multiple monthly payments.

"Basically, the lower the balance on your credit report, the better," Paperno says.

What you need to know: Your card company could place a limit on the number of times you can pay in a month, he says. All card companies will take two or three payments per month, but if you are paying weekly or more often, you should make sure the company is set up to handle such frequent payments.

Ask for a 'goodwill' deletion

If you have only one or two bad marks on your credit records, you may be able to get them expunged, says John Ulzheimer, the president of consumer education for, based in Costa Mesa, Calif.

Say you've paid late but have an otherwise spotless credit history. You can ask your lender for a "goodwill deletion," he says. "It doesn't mean it is wrong or was reported incorrectly. Essentially, what you're doing is asking the creditor to cut you some slack."

The good news: "You'll be surprised how many times they will," Ulzheimer says.

The bad news: "If you're habitually late, it won't work," he says. This is strictly for folks who error rarely.

As for whom to ask, start with customer service. But you may have to go up the ladder. And make your request as soon after the error as you can. "The sooner, the better," Ulzheimer says.

It can make a difference in a credit score. "If you have two or three bad things on (your) credit report and you get one or two removed through goodwill deletion, you will be surprised how quickly your score will go up," Ulzheimer says.

Pay for removal

If you have an account that's gone into collection, sometimes collectors will agree to remove the debt from your credit reports if you agree to pay if off.

"You'd be surprised how many collection agencies will stop credit reporting in exchange for payment," Ulzheimer says.

But before you agree to or pay anything, you want the arrangement in writing. Get a letter on company letterhead that spells out the collection agency will remove the debt from all three major credit reporting bureaus.

The process is sometimes called "pay for deletion," Ulzheimer says. And "while credit bureaus frown on those arrangements, it's not their data that's being reported."

Protect yourself in a short sale

After a short sale, the mortgage lender often will report to the credit bureaus that the home loan was settled for less than the full amount. In addition, it can also note the amount of the deficit as "balance owed" on the credit reports, even though the obligation has been finalized and no additional money is owed.

In other words, if you have a $300,000 mortgage and sell your house for $250,000, the bank could report a balanced owed of $50,000.

While the short sale will damage your credit scores dramatically (as much as a foreclosure, according to examples released by FICO), you can mitigate the damage slightly by arranging with the lender not to report a balance owed.

The best time to negotiate this with the lender is before or during the short-sale process, Ulzheimer says. While you can attempt it after the fact, that's not as practical.

"After it's been paid, the lender starts to lose interest in speaking with a former customer," he says.


Preparing Financially for the Unexpected

Most couples know that they need to discuss large financial decisions, such as buying a car, college planning and home renovations. However, much of the day to day financial maintenance is left to just one person. Would you know how to handle your finances if anything happened to your spouse? Here's a financial checklist of information everyone should have about their money:

Location of important documents

Wills, titles, deeds and other vital financial documents are usually stored in a safe or a safe deposit box. Be sure you know where it's located and how to access it. Keep in mind that in Wisconsin, it can take a court order to open a safe deposit box that is kept only in your spouse's name.

Monthly bills

Find out which bills are paid with which accounts and when they are due. If you use online accounts, be sure both partners have the usernames and passwords, or know where this information is stored. This will reduce the hassle and stress that comes from missing payments or accidentally overdrawing an account.

List of assets

Each partner should know their combined assets, including real estate, automobiles, personal income tax returns, life insurance policies and investment accounts or mutual funds. Having all of this information readily available will help you avoid being victimized by scammers claiming to have assets that belonged to your spouse that require paying a fee to transfer to you.

Up-to-date wills

This may sound like common sense, but both partners should know where to find the other's most current will. If you don't currently have a will, it's important to put one together. Even if your finances are simple, it's a good idea to hire an attorney to draw up the documents.

If the unthinkable does happen, there are a few things the surviving spouse should remember to stay in good financial standings. First, continue to pay debts, including mortgages and utility/phone bills in order to maintain a good credit rating. Second, don't immediately make permanent significant financial decisions like selling your home. Take time to think these decisions through thoroughly after you've practiced managing your individual finances for a while.

Take these steps now to give yourself peace of mind, knowing that your finances will be stable, no matter what happens.

Source: WBA Consumer Column 9.21.12

Plan Now for Winter Travel

Fall is nearly over and with winter on its way, now is the perfect time to start planning and saving for your winter traveling. Whether you're taking a winter vacation to warmer parts of the world or visiting family for the holidays, planning ahead and booking now can save you hundreds of dollars on your trip.

Buy your plane tickets now

Typically, airlines start actively managing their cheapest seats about four months before departure. Check prices online for your flight and buy early, especially for holiday travel when prices go up. If possible, fly home on a Saturday (typically the cheapest day to travel) rather than Sunday (the most expensive day to travel).

Own a gas-guzzler? Rent a hybrid

For road trips, compare the cost of renting a fuel-efficient car to the price of filling up your current vehicle. Be sure to factor in space for passengers and suitcases, along with how much you'll be using the vehicle once you reach your destination. Another option is to skip the flight and the car ride and simply take the train or bus. They are cheaper than flying and can be more convenient than a car if you're not planning on driving once you reach your destination.

Stay with relatives or friends

Even if you're vacationing for fun rather than a family gathering, stay with friends or relatives to reduce the cost of a hotel. Make sure your hosts know you plan to stay with them well in advance, especially if you're not specifically visiting them. If possible, buy your own groceries and stay in for meals to further reduce travel expenses.

Use hotel loyalty programs

Hotels, just like many service industry businesses, are looking for loyal customers. Start building up points with your favorite hotel chain by taking "stay-cation" weekend trips now, then redeem those points during the holidays or for your destination vacation. The same concept applies to airlines. Stick with one airline as much as possible prior to your trip to stockpile miles.

Go all-inclusive

All-inclusive deals factor common vacation expenses into the price of the trip. The biggest advantage of an all-inclusive vacation is that you know exactly how much you'll spend when you book the trip. Meals, drinks and activities are included in the rate rather than added on later, so you avoid accidentally over-spending on "extras."

Planning your winter travel now will save you time and money when temperatures drop. Pick a destination and start saving now.

Source: WBA Consumer Column 8.27.12