A couple of months ago we advised against buying long-term CDs at the bottom of a rate cycle.

The common wisdom is to go long at the top of a rate cycle and short at the bottom.

Some of our readers disagreed with that strategy.

“You can usually go for the longest term to lock in the highest rate, then break the CD if rates go up substantially,” Mark C. told us.

Even after paying the early withdrawal penalty “you will usually come out equal or better to the shorter-term CD’s yield…”.

So we decided to test that theory with the best-paying nationally available 5-year CDs. They are:

3.50 APY from Bank United, with a $5,000 minimum deposit.

3.30% APY from EverBank, with a $1,500 minimum deposit.

3.25% APY from DimeDirect.com, with a minimum of $500.

Bank United, which has 75 branches in Florida, has the most reasonable early-withdrawal penalty: After the first year, you forfeit six months worth of interest.

If you take your money out after a year, and only get paid for six months worth of interest, then you’d still have earned 1.75% — almost as much as the 1.90% APY the top-paying 12-month CD is paying.

Hold on to your 5-year CD for 24 months and that return grows to something like 2.6% — which is more than the 2.30% APY you can earn with the best 24-month CD.

So in this instance, Mark is right. You can game Bank United’s 5-year CD to make bigger short-term profits.

(Dear Bank United executives: While I’m saying that it’s possible to take advantage of your long-term CD rates in this way, I’d never encourage our readers to do such an irresponsible thing. Please put down the phone. DealMaven)

But as another reader, KenBDG, said during this discussion: “One important note is that early withdrawal penalties can vary considerably. Some 5-year CDs have only a 6-month penalty, but some have much higher penalties.”

EverBank, based in Jacksonville, Fla., is one of those banks.

It charges one-quarter of the interest you would earn over the entire 5-year term, no matter how long your keep it.

Take your money out after one year, you’ll actually lose money. They’ll reclaim all of the interest you earned and ding your principal for the rest.

(That’s harsh. Do you know of any other bank that won’t return your full, initial deposit, on demand?)

Keep it for two years and your return will be a paltry 0.5%.

DimeDirect.com, the online operation of Dime Savings Bank of Williamsburgh, which has almost two dozen branches in the New York area, charges 24-months worth of interest.

Take your money out before two years are you’ll earn nothing, although Dime will return the full amount of your principal.

Neither of those are good deals for savers plotting to hop out early.

The nation’s largest bank, and biggest issuer of debit cards, is finally doing the right thing.

Bank of America will stop letting customers overdraw their checking accounts so it can zing them with overdraft fees.

Starting this summer, it will decline purchases that overdraw a customer’s checking account and inform them that they’ll have to pay an overdraft fee before allowing them to withdraw more money than they have in their account from an ATM.

That’s pretty much the way things were before banks realized they could make a fortune by penalizing customers who unwittingly overspend their accounts.

Overdraft and insufficient fund fees netted banks more than $38 billion in 2009.

Bank of America tried to stem growing public anger over the hidden charges last fall, when it agreed not to charge more than four overdraft fees a day, and waive any fees on accounts that were overdrawn by $10 or less.

But the Federal Reserve still stepped in and told the nation’s commercial banks that they could no longer automatically enroll customers in “overdraft protection.”

Starting July 1, banks must get customers to opt-in to those plans before they can be charged overdraft fees.

Some banks (Chase we’re talking to you) have already launched high-pressure marketing campaigns in an effort to enroll as many customers as they can.

But that effort flies in the face of every consumer survey we’ve seen.

When given a clear choice between paying overdraft fees or having a transaction refused, the huge majority of Americans say they want the purchase or cash withdrawal turned down.

Who wants to overdraw their account for a $5 sandwich and have a $35 overdraft fee tacked on by the bank?

While Bank of America will still allow its checking account customers to sign up for overdraft protection, it acknowledged the fact that it expects very few to do so.

“What our customers told us is that, if I don’t have the money, I don’t want to overdraft” with debit cards, Susan Faulkner, head of the bank’s deposits and card products business, told USA Today.

“We don’t think our customers would come in and opt in” to overdrafts and their associated fees.

With Citigroup already pursuing a similar policy, we can only hope other banks will get the message and follow suit.

It’s the least the financial industry can do after all of the abuse and shabby treatment their customers have endured over the past couple of years.

When you bid on a home, you usually open negotiations with a deliberately low offer.

Short sales are different.

Lenders must approve any deal that allows a home to be sold for less than what’s owed on the mortgage, and it can take weeks, sometimes months, for them to evaluate and approve (or reject) each offer.

That makes it tough to do a lot of dickering.

So your first bid needs to be a realistic offer with a good chance it will be accepted.

Start by estimating the fair market value of the home using comps (values of similar properties that have sold near the home in the past few months).

Take the condition of the home into account and reduce your estimate if the home needs repairs.

Calculate 82% of the home’s value, throw in a few thousand dollars to cover the lender’s cost of doing a short sale (ask your agent what that typically is for your area), and you have a good starting point.

Now look at the quality of your comps.

If most of the homes weren’t foreclosures and spent several months on the market, you’ve probably got a good bid.

If most of the homes were foreclosures and only spent a few weeks on the market, you’ll have to offer more — possibly up to full market value.

Let’s see if we can take some of the anxiety out of deciding whether it’s smart to convert your traditional IRA to Roth IRAs this year.

It’s a good move for younger savers who are a long way from retirement and can expect to be making more in retirement than they are in their late ’20s or early 30s.

It’s not a good move for savers in their 40s and 50s who are closer to retirement, have reached their peak earning years, and will almost certainly see their income drop after they retire.

There. Problem solved.

Follow those simple guidelines and you’ll stand a good chance of minimizing your tax bill and maximizing your balance for these retirement accounts.

The decision seems like a tough one because it requires you to make many assumptions about how much you’ll be making 20 or 30 years from now and what tax bracket you’ll be in.

Who can predict tax rates a few years from now, much less a few decades from now.

It is enough to drive you a little crazy and everyone’s fretting over this because the government has removed all income restrictions on these conversions this year, making them open to more prosperous taxpayers.

(Prior to 2010 you had to have a modified adjusted gross income of $100,000 or less.)

Washington is also offering taxpayers a one-time deal: You can pay all of the tax on your conversion in 2010 or in equal installments on your 2011 and 2012 tax returns.

All deductible contributions made to traditional IRAs, and all of the earnings from the investments in those accounts, will be considered taxable income if you convert to a Roth IRA.

Voluntarily paying the tax on that money now doesn’t make sense unless you think you’ll be earning more, and in a higher tax bracket, after you retire.

That certainly doesn’t describe many 40- or 50-year-olds I know. They’ve got to save like crazy to insure that their income doesn’t fall 20%, 30% or more after they stop working.

But if you’re young, with 30 or 40 years of better jobs and higher salaries ahead of you, then there’s a good chance your retirement income (and tax bracket) will be higher than your current income (and tax bracket).

Think about it.

How many people retiring today stand to earn more from pensions, Social Security and their savings than they did from their first or second jobs, 40 years ago?

A lot, right?

This Roth IRA conversion calculator reflects this reality, and can help you make a decision based on your specific age and tax bracket.

Let’s say you get a notice that the interest rate on your Chase credit card is going up.

You send Chase a letter rejecting the increase and close the account so that you can repay your balance at the current, lower interest rate.

You’re done dealing with Chase, right?

Maybe not.

According a lawsuit recently filed in federal court, cardholder Barry Woldman of suburban Chicago rejected Chase’s “change of terms” and closed his account in March 2009.

But in August 2009, Chase sent him another change of terms, which Woldman did nothing about because he had already closed his account.

Chase allegedly took this to mean that he accepted the new terms and raised the interest rate on the balance of the closed card.

Now, who in their right mind would agree to a higher interest rate on a closed credit card account?

No one.

Woldman rejected a rate increase once. Why should he have to go to all of the trouble of rejecting it again?

And what if he had rejected it? Following Chase’s logic it could send him one change notice after another, as often as it wanted, until he finally missed one.

These are the kinds of deceptive credit card policies that have consumers hopping mad over how they’re being treated and vowing that there will never, ever, ever be another bank bailout.

We asked Chase if this is really what happened, but it declined to comment on pending litigation.

If the same thing happened to you, you can discuss joining the lawsuit by contacting attorney Adam Levitt of Wolf, Haldenstein, Alder, Freeman & Hertz.

Home prices didn’t fall as quickly as expected in the final three months of 2009, according to the National Association of Realtors latest report.

In fact, home prices showed so much improvement that we have to wonder if they’ll really fall another 5% to 10% this year as some experts have projected.

The national median price of a home in the fourth quarter of 2009 was $172,900, down 4.1% from a year ago — far better than the 13.8% loss in late 2008 when the financial crisis struck.

(A median price is where half the homes sold for more, the other half for less.)

Fewer cities suffered the kind of double-digit declines that were so common during the recession — and put about one-in-five borrowers underwater on their mortgages.

Almost half of the markets the Realtors surveyed (67 of the 151) actually had higher median home prices, more than double the 30 cities that recorded price increases in the third quarter.

Prices in Akron, Ohio, for example, were 22.8% higher than a year ago, and in Cleveland they’re up close to 25%. Property values in Springfield, Ill. are more than 15% higher than they were in the fourth quarter of 2008.

Most of the places where prices continue to post big declines are in those states where the housing bubble was the biggest — Florida, Nevada, Arizona and California.

Las Vegas, Nev., for example, saw a 23.3% decline last year to a median price of $139,400 from $181,700 the year before.

Click here to find out how home prices are changing in your area.

Lenders are offering traditional fixed-rate mortgages for less than 5% in nine of the 10 major cities we surveyed this month.

That’s quite an improvement from July when only one of the 10 cities we looked at had those loans available for less than 5%.

It’s nearly as good as what we found in November, when average mortgage rates plunged to new record lows and loans were available for less than 5% in every single city we surveyed.

To find the best rates in each city we search the databases at Bankrate.com and Interest.com.

We compare 30-year, fixed-rate loans with no points and fees of less than $2,000 because that’s the best mortgage for most borrowers.

The best deals we found were:

Boston: 4.625% from Total Mortgage Services.

Charlotte: 4.875% from Assent Mortgage Company.

Chicago: 4.875% from AmericanInterbanc.com.

Detroit: 4.75% from Amera Mortgage Corporation.

Houston: 4.875% from EverBank.

Los Angeles: 4.875% from AimLoan.com.

Memphis: 4.875% from Atlantic Mortgage & Funding, Inc.

New York City: 5.0% from Astoria Federal Savings.

Orlando: 4.75% from EZZ Financial

Seattle: 4.875% from Mortgage Capital Associates.

The fine print: These mortgage rates are for conforming loans (less than $417,000), and for borrowers with credit scores of at least 700. For scores from 680 to 699, you’ll usually pay higher fees, up to 1% of the loan value, or a higher rate.

The credit card industry has been on a rate-raising, fee-hiking, rule-writing rampage ever since Congress voted to ban its most abusive practices last spring.

But that aggravating snit fit is finally over.

Most of the Credit Card Accountability and Responsibility Act law’s most important new regulations take effect today.

Many of your credit cards most costly and infuriating practices — double-cycle billing, universal default, increasing rates on existing balances — are now prohibited.

(Click here for a rundown of the 8 good things the Credit CARD Act will do for consumers.)

Only a few final provisions — such as requiring cards to reduce interest rates for consumers with improving credit reports — remain to take effect Aug. 22.

Unfortunately, the banks are already hard at work on new and creative ways to make up the lost revenue.

(Click here to see our post Credit cards crank up abusive new fees.)

Among the new costs being foisted on credit card customers, and not covered by the new regulations, are:

• Annual fees. Banks are raising them on accounts that already have them and imposing them for the first time on accounts that don’t.
• Inactivity fees. Let a card sit for a year, and it may begin charging a $3 a month fee until you buy something with it.
• International transaction fees. The cost of making purchases in foreign currency is going up and the fee is being extended to items bought overseas even if the purchase was made in dollars.
• Balance-transfer and cash-advance fees. Minimum fees are going up and limits on much you could be charged (these fees are usually a percentage of amount transferred or borrowed) are being eliminated.

With the recession over and CD rates at record lows, this seems like the right time to divert more savings into a 401(k) plan.

If you haven’t been laid off by now, you probably won’t be. So you can risk tying-up more money in long-term savings.

And you’ll probably save more on your taxes than you can earn from the record low returns on CDs or money market accounts.

Putting even a little more into your 401(k) plan can also make a big difference in your net worth.

Let’s say you contribute an additional 1% of your income — a modest increase by almost any definition.

If you’re making $50,000 a year, and get paid twice a month, that’s $20 per paycheck.

Although the full $20 will go into your retirement plan, your take-home pay probably won’t decline by that much.

Contributions to traditional 401(k) plans are tax deductible, which means you don’t have to pay income taxes on that money until it’s withdrawn.

That is one of the things that makes these kinds of retirement plans one of the most valuable tax breaks available to most of us, right up there with the ability to deduct the interest on a mortgage.

It also means your take-home pay will only fall 65 to 90 cents for every dollar you save, depending on your tax bracket.

But that extra $20 per paycheck can add $49,000 to your retirement savings over a 30-year career if the investments in your 401(k) earn a good, but not spectacular, average return of 7% a year.

If your employer matches all or part of that contribution, you’ll be even further ahead.

You’d have an extra $74,500 if that 1% increase on your part leads to your company boosting its contribution to your 401(k) account by 0.5% of your income.

See just how much you could benefit from boosting your contribution with our 401(k) calculator.

Less than two weeks ago we scoured the country to find the top-paying savings accounts.

But three of the five rates have already been cut, including the top two.

That sent us back to work and we’re pleased to report that we’ve found four new deals that are actually better than the ones they replace.

These offers clearly come with no guarantees. Savings account rates are variable and can change tomorrow — or not until next year.

Yet they offer a better return than the top-paying 3-month CDs, and all but the very best 6-month CDs.

The top rates on nationally available savings accounts now are:

1.75% APY with a $25,000 minimum deposit from Franklin Synergy Bank, which has two branches in Franklin, Tenn.

1.70% APY with a $10,000 minimum deposit from The Palladian Private Bank, which is based in Chicago and has 34 locations in 10 states.

1.55% APY with a $1 minimum deposit from UFB Direct, an online affiliate of Waterfield Bank, which has a couple of full-service offices in Carmel, Ind., and Germantown, Md.

1.55% APY with a $1 minimum deposit from Chesapeake Bank, with a single branch in Williamsburg, Va.

Most money markets currently pay less than savings accounts, with one notable exception: the Mega Money Market Account pays 2.00% APY and is available from three jointly owned banks in Oklahoma.

Compare these rates with the best savings rates from scores of other banks in our extensive database.

It’s come to this.

U.S. savings bonds — yeah, savings bonds — have become a better investment than most CDs.

Series I Bonds are paying 3.36%, which is more than the best, nationally available 6-month, 12-month, 24-month and even 36-month certificates of deposit.

Indeed, only a few top-paying 5-year CDs can beat that return.

Although the interest rate on Series I Bonds resets every six months to reflect the current rate of inflation, it’s hard to imagine the Consumer Price Index will decline anytime soon.

Although you can keep savings bonds for a long time, you don’t have to.

They can be cashed out after 12 months by paying a modest penalty of 3-months interest. After five years, there’s no redemption penalty.

Let’s say you only kept the bonds for 15 months. Your annualized return would still be 2.68%. You can’t earn anywhere close to that with the best 12- or 24-month CDs.

Savings bonds have several tax advantages over CDs, too:

• You don’t have to pay tax on the interest you earn until the bonds are redeemed. With CDs, you’re taxed on the interest in the year it’s earned.
• The interest earned on savings bonds is exempt from state and local income taxes. That’s a big plus for residents of states that levy a hefty tax on investment income, such as California and New York.
• The interest can even be exempt from federal income taxes if the bonds are used to pay for eligible college expenses. (See IRS Publication 970, Tax Benefits For Education.)

Unfortunately, the government will only allow you to invest $5,000 a year in a single type of bond, under a single Social Security number.

But it’s possible to buy $5,000 worth of I Bonds online, and another $5,000 worth of paper I Bonds, with a single Social Security number.

The easiest way to buy savings bonds is at TreasuryDirect and have them issued electronically to your account.

Paper bonds are still available at most banks.

The Florida Consumer Protection and Homeowner Credit Rehabilitation Act.

Sounds like a good thing, right?

But it’s the misleading title of a 53-page bill the Florida Bankers Association has drafted and wants the state legislature to enact.

The new law would make it faster and cheaper for lenders to repossess property by giving them the right to foreclose without having to go to court and obtain the permission of a judge.

That isn’t a radical idea. Thirty-seven other states already have laws that allow for non-judicial foreclosures.

But calling it “consumer protection” is a positively Orwellian attempt to manipulate public policy through propaganda and misinformation.

This is a law that could put families out of their homes in as little as three months and leave them liable for any losses the lender incurs. It is truly a bill of the banks, by the banks and for the banks.

Joe Manausa, a Tallahassee real estate broker, has already asked the very relevant question, “Does The Florida Bankers Association Think You’re Stupid?” and started soliciting more honest names.

Among the suggestions already submitted are:

• The Florida Bankers Association Bill
• The “Florida Bankers Want To Remove Judges From Making Sure The Laws Are Enforced Fairly” Bill
• The “Banks Should Be Able To Foreclose If They Feel Like It” Bill
• The “Save the Banks” Bill
• The “Bend Over!!! Your Assets are Mine!!!” Bill

We can only hope that Florida legislators think long and hard before supporting this manipulative effort — no matter how much the banks have donated to their campaigns.

Click here to read more about the bankers’ bill on TampaBay.com.

Is this the wave of the future?

The new Electric Orange checking account from ING Direct doesn’t come with checks.

It’s the closest thing to a truly paperless checking account we’ve ever seen.

The online bank owned by the Dutch financial giant ING allows customers to access their money through:

• A debit card.
• An online bill payment system.
• Person2Person electronic transfers, which allow you to send a friend or relative money without knowing their account number.
• Electronic checks. If you simply must give someone a paper check, ING will print and mail it for you.

All of that is free (even the postage for electronic checks is covered), and there’s no minimum balance or monthly service charge.

You can use the debit card at 35,000 Allpoint ATMs without charge.

What you never, ever get is a book of checks.

A short Electric Orange video explains how this electronic checking account works.

ING emphasizes the fact that this is an interest-paying checking account that acts “like a savings account” — which isn’t saying much these days.

Electric Orange pays a modest 0.25% APY on balances of under $50,000, 1.35% APY on balances between $50,000 and $100,000, and 1.40% APY on balances over $100,000.

But it’s the paperless operation that sets this account apart.

“Writing checks is a thing of the past,” the video claims.

We think ING may be right.

Ben Bernanke has unveiled his plan for unwinding the Federal Reserve’s economy-boosting policy that’s driven interest rates to record lows.

When the Fed Chairman might set that plan into motion remains a mystery.

Economists who thought June might be a good guess are now saying November or even next year since he seems determined to hold interest rates ridiculously low for as long as he possible can.

The plan also has a surprising twist that makes us worry about how quickly the horrible rates on CDs, savings and money market accounts will improve after the Fed finally decides to act.

For more than three decades the Fed has controlled short-term interest rates through what’s called the federal funds rate — the rate it allows commercial banks to charge one another for overnight loans.

Lowering that rate to 0% certainly played a big role in driving interest rates on loans and consumer deposits to the record lows we’re seeing today.

But Bernanke says he’s going to reverse that process by boosting the interest rate banks are paid for keeping excess reserves on deposit with Fed, which is currently 0.25%.

Increasing that rate would supposedly give the banks more incentive to keep their money parked at the Fed, reducing the amount they have to lend and driving up the rates for all sorts of consumer and commercial loans.

Raising any of the Fed’s short-term interest rates would supposedly lead to higher interest rates on all types of deposits.

But we’re about to enter uncharted territory here, and no one really knows how much, or how fast, an increase in the Fed’s rate on excess reserves will trickle down to savers.

In our opinion, allowing us to earn a reasonable return is pretty important given the beating we’ve taken from the Fed’s current policy.

Average returns on 3-month, 6-month, 12-month and 24-month CDs crashed to new record lows in this week’s Bankrate survey.

Let’s not kid ourselves.

Bernanke has done everything he can to save the big banks from their own irresponsible lending by denying millions of hardworking Americans anything approaching the market rate their savings deserve.

Thanks to the Fed’s policy Chase Bank can pay a pitiful 0.05% APY on its savings accounts while JPMorgan Chase Chairman and CEO Jamie Dimon took home $17.6 million in total compensation last year.

Does that seem fair? No it does not.

Now Bernanke seems more concerned about pulling the $1.1 trillion the Fed pumped into the economy to fight the recession before that stimulus causes inflation to soar out of control.

We can only hope that savers aren’t the last to benefit from Bernanke’s plan to return the economy to a more normal, market-driven state of affairs.

Whenever that may be.

With interest rates this low, you need to make the most of every opportunity to boost the return on your savings.

That means taking advantage of your bank’s “relationship” rates.

In most instances, that’s where checking account customers are offered higher interest rates on savings accounts or certificates of deposits.

Some relationship deals don’t make you feel all that special.

Chase Bank, for example, is paying 0.05% APY on savings accounts with balances under $10,000, and 0.10% APY to customers who qualify for “relationship rates.”

But Fifth Third Bank, with almost 1,300 branches in 13 Midwest and southeastern states, has a little better offer.

It will double the interest on savings accounts, which means you can earn 0.50% APY on balances between $2,500 and $10,000, and 1.00% APY on balances over that.

When you consider that the best 3-month CDs are only paying 1.25%, that makes a Fifth Third savings account a pretty good place to park short-term cash.

Country Bank leads our rankings of the best, nationally available 6-month CDs.

The bank, which has 14 branches in central Massachusetts, is paying 1.60% APY with a $500 minimum deposit.

But if you have a checking account (with a regular direct deposit and minimum balance of $1,000) you can earn 1.85% APY on 6-month CDs.

Salem Five , another bank with more than a dozen Massachusetts’ branches, has a similar deal.

Its Gold Star checking account customers qualify for higher-paying Relationship CDs.

A regular 9-month CD currently pays 0.75% APY. A Relationship CD earns 1.25% APY. A regular 24-month CD pays 0.90%. A Relationship CD pays 1.75%.

(The only drawback is Salem Five’s Relationship CDs require a hefty $10,000 minimum deposit.)

We’re not suggesting that relationship deals like these are worth the cost, or the hassle, of opening a new checking account.

We just want you to benefit from the relationship rates at your current bank — and put a few extra dollars in your pocket.

You can earn far more from a top-paying savings account than you can from most short-term CDs.

The average return on 12-month certificates of deposit has fallen to a measly 0.77% APY, and the average return on 24-month CDs has plunged to 1.19% APY.

But Colorado Federal Savings Bank is paying 1.70% APY on its savings account.

A minimum deposit of $2,500 must be maintained to qualify for that rate, but the account can be opened online and is available to savers nationwide.

(Fine print: Although accounts can be jointly held, you aren’t allowed to name beneficiaries in the case of death, which is a deal-breaker for some.)

Although the Web site for this online bank based in Greenwood Village, Colo., says this is a fixed-rate account, we checked and that’s wrong.

Like all savings accounts, the rate at Colorado Federal is variable and could be reduced at any time.

But there’s no long-term commitment with a savings account, so if you become disenchanted with your rate, you can always withdraw your money and move on.

The next-best rates on nationally available savings accounts are:

1.60% APY from Bank of Internet, an online bank based in San Diego. You need only $100 to open an account and there are no minimum balance requirements.

1.50% APY from American Express Bank, the online bank owned by the credit card company. No minimum deposit is required.

1.50% APY from Ultima Bank Minnesota, with locations in Fosston and Winger, Minn. A minimum deposit of $1,000 is required and must be maintained to earn interest.

1.50% APY from Dollar Savings Direct, the online division of Emigrant Bank, which has dozens of locations in the New York City area. A $1,000 account balance minimum is required.

Most money markets currently pay less than savings accounts, with one notable exception: the Mega Money Market Account pays 2.00% APY and is available from three jointly owned banks in Oklahoma.

Compare these rates with the best savings rates from scores of other banks in our extensive database.

The future of credit cards is almost here.

The Citi Forward Visa is probably what it looks like. At least on a good day.

Everything changes on Feb. 22, when most of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 takes effect.

It bans many of the industry’s most abusive practices, and card companies have been acting out ever since it was passed — jacking up rates, slashing credit limits, raising fees and imposing tough new repayment terms.

That has turned the Forward card, which was a good but not outstanding offer when it was introduced last spring, into one of the better deals of this brave new world.

Citi has risen to the top of the heap by simply leaving most of the Forward card’s terms unchanged over the past year.

It still has, for example, no annual fee. Most new credit cards come with one since the new laws don’t regulate annual fees.

Cardholders start out with seven months of 0% financing on purchases and balance transfers, which is a little better than the typical six-month no-interest offers these days. (Ignore the “0% APR for 6 months” on the Citi Forward homepage. It is seven months as stated on “terms and conditions.” We checked.)

When the introductory period ends, the card charges an adjustable rate that’s 14.24% APR (prime plus 10.99%). That was a little high last spring, but it’s quite competitive now.

If you stay under their credit limit and pay your bills on time for three straight months, Citi will lower your interest rate by 0.25%.

Do it again and Citi will whack another 0.25% off your rate up to eight times for a total reduction of 2 percentage points.

The card also allows you to earn points in Citi’s “Thank You Redemption Network” — 5 points for every $1 spent on dining, books, movies and music; and 1 point for other purchases.

The extra rewards for entertainment spending indicate that Citi wants to attract younger consumers to the Forward card. That’s good, because they’re the ones having the toughest time finding a good deal on credit cards right now.

You can get 6,000 bonus points for making a modest $250 in purchases in the first three months, and another 5,000 points if you sign up for paperless statements.

Points can be redeemed for cash, a credit on your statement or gift cards.

The redemption rate — 10,000 points for a $100 gift card — means you’re getting a run-of-the-mill rebate of 1% on most purchases, and 5% on your entertainment spending.

Within three days of applying for a mortgage, you’ll get a “Good Faith Estimate” that lays out all of the terms and fees for the loan you want.

But are you getting the best possible deal?

On Jan. 1 the government required lenders to start using a new, standardized GFE that can help you decide.

On the last of the three pages you’ll find two new comparison charts that weren’t on the old GFEs created by banks and mortgage companies.

The first is called the “tradeoff table,” and shows what your monthly payments and closing costs might be for slightly different mortgages from the same lender.

The first option shows what you’d pay with lower settlement charges, which is great if you’re short on cash, but with a slightly higher interest rate and monthly payment.

The second option is for a loan with a lower interest rate, and lower monthly payments, but higher settlement charges.

The “shopping chart” allows you to compare similar loans from different lenders, including the interest rate, monthly payments and closing costs.

You can see even more comparisons like that by searching our extensive database of mortgage rates available in your area.

Even if you’ve already applied for a mortgage, it’s not too late to put the approval process on hold and pursue a better deal.

A loan from Lending Club might be the way to pay off credit card debts, make critical repairs to your home or even finance a wedding or adoption.

You can borrow up to $25,000, and repay the loan in 36 equal monthly payments, with a fixed interest rate as low as 7.89% APR.

If you apply before Feb. 1, you’ll even receive a $100 credit to your account within 30 days of receiving the loan.

Just click here to qualify for this exclusive offer to Bankaholic readers. (Sorry, time’s expired on the bonus but you can still go to Lending Club’s home page to apply for a loan.)

Peer-to-peer, or social lending, allows investors to provide money directly to worthy borrowers.

By cutting out banks — the traditional and rather costly middle-man for most loans — investors can earn a greater return on their savings while borrowers pay less for the privilege of using that money.

Lending Club says its net annualized return for its investors has been over 9.5% since 2007 (including losses from defaults), and borrowers pay up to 30% less than they would for similar loans at traditional financial institutions.

The Web site charges a processing fee that runs from 1.25% to 4.25% of the amount you’re borrowing, which is subtracted from the loan proceeds prior to disbursement.

But there’s no application fee. So if you don’t get your money, you don’t pay a thing.

The online application process is fast — Lending Club claims it takes just 3 minutes — but you’ll need a minimum FICO score of 660 and maximum debt-to-income ratio of 25% (not including a mortgage) to qualify.

Applications are assigned one of 35 grades from creditworthiness (from A1 for the best credit to G5 for the worst) with the grade determining the interest rate.
Information about your loan (without your name, of course) is then posted for investors to review and fund.

Even if you have great credit, investors will only provide a portion of your loan — as little as $25 in some cases — to limit their losses if you default.

Don’t be surprised if it takes scores of investors to fully fund your loan.
That’s how the system works.

The major credit card companies have succumbed to public pressure and stopped taking a cut of some donations earmarked for Haiti disaster relief.

But they’re only waiving the usual 3% transaction fee for a few specific charities, and only for the next few weeks.

If you want to donate with your credit card, here’s where you can give fee-free:

Mastercard Worldwide: American Red Cross, AmeriCares, UNICEF, Save the Children and CARE USA.

American Express: Charities listed by the U.S. Agency for International Aid.

Visa: American Red Cross, AmeriCares, CARE USA, Direct Relief International, Habitat for Humanity, International Rescue Committee, Mercy Corps, Oxfam America, Save the Children, U.S. Fund for UNICEF, and World Vision. Visa will also donate all fees made on donations to other Haiti disaster relief programs to the American Red Cross.

Discover: American Red Cross. If you have over $20 in Discover Cash Back bonuses, you can donate those toward disaster relief, and Discover will match the first $1 million of those donations.

We think it’s way past time for the credit cards to permanently abolish this fee on donations to all legitimate relief organizations.

It’s shameful for financial companies to profit from money intended to help the sick, the injured, the hungry and the homeless.

Why does it take a monumental disaster such as Hurricane Katrina and the Haitian earthquake for the credit cards to (sort of) do the right thing?

You’ve got to watch out for all the sneaky ways stores and Web sites are creating to slip recurring charges onto your credit cards.

I fell for the “free magazines” that Loehmann’s clothing stores are offering.

As I was checking out a cashier said I could sign-up for three free months of the magazines being promoted on a laminated place mat on the counter.

“It’s a really cool offer,” she said.

I like free, and it looked legit, so I signed up. The cashier recorded my choices by scanning the bar codes for the titles I chose.

Stupid me. A few months later, three mysterious $15 charges showed up on my account.

The cashier didn’t mention that those free trials led straight into paid subscriptions, charged to the card I used at Loehmann’s, unless I went online to cancel the deal.

This isn’t a one-time hit either. The subscriptions automatically renew each year until you demand they stop.

I blame myself for neglecting to read the fine print and grilling the cashier about just what I was buying.

But I also blame Loehmann’s for taking advantage of its customers, especially when you’ve got a bag of clothes, a list of errands and a line of waiting customers behind you.

Lenders are offering traditional 30-year mortgages for 4.875% in all but one of the 10 cities we checked in our January home loan survey.

That’s a little higher than we found in our November survey of the best mortgage rates.

But six months ago you couldn’t find a bank or mortgage broker offering these kinds of loans for less than 5.25% in any of the markets we reviewed.

To find the best rates in each city we search the databases at Bankrate.com and Interest.com.

We compare 30-year, fixed-rate loans with no points and fees of less than $2,000 because that’s the best mortgage for most refinancings and purchases.

The best deals we found last week were:

Baltimore: 4.875% from Aurora Financial.

Chicago: 4.875% from Total Mortgage Services.

Dallas: 4.875% from D&H Lending Services.

Indianapolis: 5.00% from Stonegate Mortgage Corp.

Los Angeles: 4.875% from Compass Lending Corp.

Minneapolis: 4.875% from The Money Store.

New Orleans: 4.875% from AimLoan.com.

New York City: 4.875% from Mortgage Capital Associates.

Phoenix: 4.875% from NationsChoice Mortgage.

San Diego: 4.875% from American Interbank Mortgage.

The fine print: These mortgage rates are for conforming loans (less than $417,000), and for borrowers with credit scores of at least 700. For scores from 680 to 699, you’ll usually pay higher fees, up to 1% of the loan value, or a higher rate.

Is one of your New Year’s resolutions to get your financial house in order?

Check out a new book called One Year to an Organized Financial Life: From Your Bills to Your Bank Account, Your Home to your Retirement, the Week-by-Week Guide to Achieving Financial Peace of Mind by Regina Leeds and Russell Wild.

It will change the way you manage your money and set you on the road to financial security.

Leeds (a professional organizer) and Wild (a Certified Financial Planner) pack a lot of information into a book under 300 pages. They never dive too deeply into a sea of financial jargon, either, so if you’re a newbie to this money-saving game, you will understand this book.

The March section is particularly helpful, especially week one, which is about what tax-related information you can save or shred.

June and July are on point in describing how to prepare to retire, and if you’re looking to cut back, flip immediately to April (Spend Less, Save More) and August (Refinance and Downsize Options) – plus September if you have kids (Children and Money).

What don’t we like about the book? It’s big on organizing. Huge. Annoyingly so if you aren’t big on what’s proper feng shui or Zen when it comes to the placement of your desk.

Leeds has written other books, including One Year to an Organized Life and One Year to an Organized Work Life. She views “unorganized people” with the same distain I usually reserve for Bravo’s “Real Housewives.”

January (time to take control) is so full of hanging file folders, slotted tabs and Container Store mentions that we wonder if they’re paid endorsement fees.

And if you’re drowning under financial stress and have no idea how much you have, owe and what interest you’re paying on your debt, advice to re-paint your office and remove family photos from your desk (yes, really), aren’t going to help.

Some of the tips and advice are un-finance related, too, and more comments about lifestyle than money. If I’ve shoved my credit card statements in a drawer for the last three years and had collectors calling me all day, do I really need the advice to drink more water?

Oh, and please disregard the book’s advice to sign up for overdraft protection. Don’t do it. Here’s why.

So here’s what we recommend. Since the month is already half over, read through the January chapter. Maybe it’ll speak to you. Maybe it won’t. Not everyone works in a zone of perfect organization, nor should everyone spend days on making a Zen-approved office.

February is where you should start to pay attention.

The authors also admit that they’re not doing in-depth analysis of these topics, so if you want to know more about a chapter, your best bet is to get an entire book on the subject.

Two we’d recommend are Suddenly Frugal: How to Live Happier & Healthier for Less by Leah Ingram if you’re looking for a book on cutting back, and 10 Laws of Career Reinvention by Pamela Mitchell if you want more information on how to make money from your passions.

It’s come to this: The biggest banks are paying nothing for our savings.

Or at least nothing for the money we put in our savings accounts.

Here’s the return the four largest banks are now offering on their regular savings accounts:

Bank of America: 0.10% on all balances

Wells Fargo: 0.05% on balances up to $25,000

Citi: 0.25% with a $500 minimum balance

JPMorgan Chase: 0.01% all balances

For all practical purposes, that’s zero. Nada. Nothing more than pennies for your hard-earned savings.

Unfortunately, this is the entirely predictable result of the Federal Reserve’s campaign to shower commercial banks with all the free money they could possibly want. (It does that by charging them 0.0% to 0.25% for short term loans.)

The policy made sense when the banking industry on the verge of a calamitous collapse that would have plunged the world into another Great Depression.

It guaranteed a great yield spread between what banks paid for money (including deposits) and what they charged for loans.

And let’s be clear. The Obama administration and Federal Reserve have been willing to do almost anything over the past year to help the banking industry.

They’ve certainly done far more for the banks than they’ve done for the typical family coping with the economic fallout from the financial crisis caused by all of the banks’ irresponsible lending.

What Obama and Federal Reserve Chairman Ben Bernanke clearly didn’t anticipate was the industry’s ungrateful response and the public backlash those arrogant bankers have unleashed.

This policy requires millions of us to sacrifice even a modest return for our hard-earned savings to help a banking industry that slaps us in the face at every opportunity.

The banks won’t help us save our homes from foreclosure by modifying our mortgages. They relentlessly raise the rates on our credit cards to unconscionable heights, cut our credit limits and impose all sorts of fees and penalties if we’re a second late with a payment.

Whatever public support existed for bailing out the banks has been squandered and Obama is going to pay a fearful political price if he and Bernanke continue on the current course.

Flagstar Bank has been doing some really strange stuff with its 36-month CDs.

For much of the fall it was promoting quite a good rate on its Web site: 3.00% APY, with a minimum deposit of only $500.

At one point that would have been good enough to top our rankings of the best 36-month certificates of deposit — if the deal had been available nationwide.

But it wasn’t because Flagstar had the odd policy of paying savers who lived near one of its branches in Michigan, Indiana or Georgia less than other customers — 2.75% APY.

Around Thanksgiving, the bank dropped its rate to 2.85% APY. On Dec. 4, the return fell to 2.60% APY, four days later it hit 1.75% APY and on Dec. 16 it reached 1.50% APY — half of what it had been just three weeks before.

That was a pretty stunning drop even by last year’s dreadful standard for rampant rate-cutting.

Then, on Monday, Flagstar reversed course and increased the yield on its 36-month CDs back to a respectable 2.35% APY.

What other bank in the country is boosting the return on its CDs by almost a point in this market?

Oh, and it’s still screwing the locals. Live near a Flagstar bank and you’ll only earn 2.09% APY.

We’ve asked Flagstar about all of this and were passed around to a couple of spokespeople, the last of whom promised to get back to us.

We’re still waiting for the phone to ring with an explanation for this strange and volatile pricing.

Last month we took a look at all of the “Real Housewives” on Bravo’s reality shows that are having real financial problems because they’re living way beyond their means.

Lynne Curtain, one of these icons for ostentatious spending had been evicted from her Orange County, Calif., home over $12,000 in unpaid rent and damages.

Now the gossip site TMZ.com reports that a judge in Riverside County, Calif., has issued a bench warrant for Curtain and her husband after they failed to appear in court over $1.2 million they had been ordered to pay a former business partner.

Their excuse?

“I just sort of forgot to go because of the Christmas season,” Frank Curtain told Radar.com.

The bench warrant doesn’t mean cops are out to arrest the couple. It won’t become active as long as they remember to show up at another hearing before Jan. 27th.

But can you see my eyes roll from here?

I’m not a rich woman. I make a decent but not exorbitant living. I own a small house. I have some student loans to pay back but I also have modest savings that are growing.

How is it that little ol’ Jen Stryker can be worth more than these Bravo bitches?

Oh, that’s right. Because I live within my means.

It doesn’t matter the size of those means. I am within them: I bought a house I could afford, and I didn’t keep refinancing to use it as a bank. I chose a college with a tuition that wouldn’t put me over my head in debt. I continue to drive a late model Honda Civic with almost 100,000 miles on it.

Do I buy new things?

Sometimes. I probably spent too much at Loehmann’s last weekend. But all my furniture is used, and I still haven’t put new curtains on my windows because the ones that the previous owners left behind are just fine.

Is someone like me — or you, dear reader — supposed to feel sorry for these women? For someone who pays for a facelift when she can’t pay her rent? Or someone who kvetches about selling her cars and jewelry because she doesn’t have cash to pay her mortgage?

Am I callous to revel in their failure? Maybe.

But you won’t get any boo-hooing from me. This is their hole. They dug it. They chose to put the cameras in their faces.

I will watch them try to dig out, and hope that somewhere, the show serves as a lesson that living high on borrowed money does not make you wealthy.

Over the next couple of months the banks will almost certainly report that they were profitable during the final three months of 2009 and are on the road to recovery.

Don’t believe it.

The turnaround banks are touting is only possible because they’re still refusing to acknowledge all of the bad loans on their books.

So far, banks have written off about $600 billion in losses from the housing bubble and recession.

Estimates that we’ve seen from banking industry analysts project their true losses to be anywhere from a merely disastrous $1.6 trillion to a truly staggering $3.8 trillion.

So in the best case scenario, banks have acknowledged only about one-third of the losses they’ve suffered. In the worst case scenario they’ve dealt with a paltry one-sixth of those losses.

The losses banks are refusing to write down dwarf the profits they’ve supposedly made since the financial crisis struck in late 2008.

Allowing overvalued loans to remain on the books was part of the Federal Reserve and Treasury Department’s effort to save the nation’s banking industry from collapse.

But that policy is now working against the government’s push to get banks lending again.

The Fed is providing banks with virtually all of the free money they could possibly want. (It does that by making short-term loans to commercial banks for 0% to 0.25%).

That’s why banks don’t need our deposits and continue slashing interest rates on all types of savings to record low after record low.

Yet the banks will never respond to the Fed’s incentives and make new loans when they still have so many bad loans on their books.

So the Fed needs to get tough and make the banks acknowledge all of their overvalued assets now, even if it means they’ll have a couple of unprofitable quarters this year.

It’s a critical step towards getting the banks to lend again, getting the Fed to stop driving down interest rates, and getting decent returns for millions of savers.

That’s the real road to recovery.

Having money automatically added to your savings account each time you buy something is one way to put something aside for the future.

Now U.S. Bank has come up with one of the best spend-and-save programs we’ve seen.

It’s more generous and flexible than other programs, allowing you to build a bigger balance and rewarding your efforts with up $100 in bonuses.

The “Savings Today And Rewards Tomorrow” or S.T.A.R.T. program is available to anyone with a U.S. Bank checking and money market account.

The program transfers whatever amount you choose — anywhere from 25 cents to $5 — from your checking account to your MMA each time you buy something with a U.S. Bank debit or credit card.

If you have a U.S. Bank FlexPerks Cash Rewards Visa Credit Card or FlexPerks Cash Rewards Visa Check Card, you can have your monthly FlexPerks Cash Rewards deposited in your money market account.

You can also arrange for regular transfers each week or month, corresponding to when you get paid.

There’s no limit on how many transfers you can make or how much you can move each month.

After you’ve accumulated $1,000, U.S. Bank will give you a bonus — a $50 U.S. Bank Rewards Visa Card.

Maintain a balance of $1,000 or more for a year, and you’ll earn another $50 Rewards Card.

Once you’ve signed up for S.T.A.R.T., your monthly bank statement will list how much you’ve saved using the program.

The average return on money market accounts is a pathetic 0.23%. U.S. Bank is paying anywhere from 0.15% to 1.0% on its MMAs, depending on where you live.

But that doesn’t negate the point of these programs, which is turn you into a regular saver even if the process is a little gimmicky.

S.T.A.R.T. allows you to save much more than a typical “Keep the Change” program, which rounds up each purchase to the nearest dollar and transfers the extra coin from your checking to savings account.

It also allows you to set aside more than similar spend-and-save programs such as Wachovia’s “Way2Save,” which limits transfers to $1 per transaction.

We certainly know that store credit cards routinely charge higher interest rates and more costly fees than other credit cards.

But we were still surprised by a “change in terms” letter from the bank that provides cards for many stores, including Victoria’s Secret, Avenue, Limited, New York & Co., Abercrombie & Fitch, JCrew, Express, Pottery Barn and Restoration Hardware.

First of all, World Financial Network National Bank will impose a $1 fee for every paper statement customers receive.

While some banks have begun charging checking account customers who still want to receive statements in the mail, this is the first time we’ve heard of a bank imposing such a fee on credit card customers.

These cards have also been charging adjustable interest rates that ranged from 11.99% to 24.99% APR.

When the changes take effect everyone will pay the maximum 24.99% — 21.74% plus prime (which is currently 3.25%).

That’s much higher than the 13% to 18% APR you’ll pay on the typical adjustable-rate Visa and MasterCard.

Finally, the new agreement says cardholders must still waive their right to take billing disputes to court and settle all disagreements in arbitration.

This comes at a time most major credit cards are dropping mandatory arbitration because it’s so blatantly tilted against the consumer.

Of course you can opt out of these changes by sending World Financial a letter refusing to accept the changes, closing the account and paying off your balance under the old terms.

That certainly seems like the smart thing to do for credit cards with terms as bad as these.

Emotions play a big role in how we spend our money.

Way too big, according to a new book by psychiatrist David Kreuger.

We use money to “alter our moods, increase our self-esteem, and control others,” Kreuger says. “We use money to try to soothe emotional pains and to buy the respect of others and ourselves.”

But, as your mom (not to mention the Beatles) always told you, money can’t buy you love.

Recognizing and overcoming that destructive behavior is what The Secret Language of Money: How to Make Smarter Financial Decisions and Live a Richer Life (McGraw-Hill, $25.95) is all about.

This makes Secret Language the right book for right now: An easy-to-understand financial guide for all of those Americans trying to restore some balance in their lives after pigging-out out on easy credit.

In Krueger’s view, millions of consumers unconsciously try to spend their way to happiness.

When we allow emotions like that to rule our financial lives, we wind up spending more than we make, falling for every scam and speculative bubble that comes along, and plunging into debt.

(For a great example of how this can happen, see our post “Real Trouble For Bravo’s ‘Real Housewives.’”)

He takes money emotions down to the biological level, not necessarily to show us that our brains are to blame (he doesn’t let you blame anyone for your actions except yourself), but how to overcome gut reactions to make sound financial decisions.

The book isn’t perfect, but you can’t argue with its core message.