Are you worried sick about your debt problems?  A new poll put together by the Associated Press and AOL shows that debt problems lead to both sleep problems as well as an increased risk for ulcers, headaches, depression, anxiety, and even something as serious as a heart attack.  So if you’ve been putting off tackling your debt problems, here’s an extra incentive: do it for your health.  

Just pushing debt problems out of the way – out of sight, out of mind – is not an effective solution. You won’t ever literally forget about your debt problems.  What could happen is that you get insomnia and not understand why it’s happening.  Other people will have insomnia for the express reason that the problem of debt is forefront on their mind.  Whatever the case, dealing with financial problems is important not just for your pocketbook but for your overall outlook.  

It’s also said that debt problems are one of the major factors leading to the increased divorce rate.  Plainly, debt is a serious issue well beyond dollars and cents considerations.  If you think these health problems aren’t necessarily debt-related, just look at the numbers.  27 percent said they had increased problems with ulcers or digestive tract issues, compared to 8 percent who did not have debt problems.  With a sample of over 1000 people nationwide, this is pretty definitive.  

Figures like this give new meaning to the term “debt counselor.”  Normally a debt counselor will go through your finances and determine the best course of action to help conquer your debt.  When put in the context of this poll, a debt counselor could also be considered a debt therapist.  The better debt counselors will not just deal in dollars and cents, but help you emotionally deal with your debt trouble.  $100,000 or more in debt can be severely debilitating both emotionally and physically.  For some people, even moderate debt can be troublesome.  Whether you go to see a debt counselor or not, the results of this poll suggest that avoiding your debt problems puts your health at risk and could seriously undermine your sense of self.   

Did you know that most any credit card has some type of rewards plan.  Not all do, but most do.  Back when I was a young newb, I didn’t know this and was surprised to find that my credit card had a rewards plan.  Over a couple years, I’d built up around $300 worth of rewards points, which I could use to buy a selection of cheap gifts, cash out, or put the money back into the credit card.  I chose the last option because if I cashed out the $, it would just have gone back into paying the bill anyway.  

Any rewards card is going to have a better payout than $300 in three years of fairly-regular credit card use, but not all rewards cards are alike.  Here are a few steps you should take when both selecting rewards card and how you should use the card once it’s in your wallet. 

1. Try and pay off your balance every month.  I’ve got to emphasize the word “try” because for most people it’s pretty unrealistic that they won’t carry a balance.  But if you pay off your balance every month, you’ll reap the benefits of building up points with every purchase without going into debt.  The more you can use your rewards card like a debit card, in which each purchase will be paid off, the better.
2. Avoid fees.  Annual fees can cut into what you make via a rewards plan.  An important thing to remember is this: credit card companies don’t like to give away things for free.  If a card has a lower interest rate, it could have higher fees.  If it has a generous rewards plan, it might have higher fees and higher interest.  You need to find a healthy balance on the card.
3. Be sure to choose a card that is a match for your lifestyle.  Drive a lot?  Get a gas rebate card.  Fly a lot?  Get an airline card.  Want cold, hard cash?  Check to see where you can build up the most rewards points with the card.  
4. Finally, factor in how putting the money back into the card will save you money.  For example, you might not even be interested in the money you earn from rewards points – you may instead be interested in making your credit card a little cheaper.  Rewards dollars put back into the card can offset what you lose to interest and fees, ensuring that you don’t go too deep into debt.  Generally, it’s recommended that you cash out rewards points or put the money back into the card, rather than buy merchandise.  The time you want to buy a product is with a product-based card, such as an airline card or store-specific card.   

Where’s there’s money, there’s scammers.  You can be certain of that.  Case in point, there are growing problems with identity theft revolving around the economic stimulus check package.  Identity thieves are working double time trying to get people’s social security numbers – as social security numbers mean dollar signs. 

People are so eager to gain their stimulus check, and so intimidated by the IRS, that identity thieves are using this scenario to dupe people into providing financial information.  Look out from scam emails that require you to fill out a form – including S.S.#, bank account info, and pin numbers – claiming this information is needed to process your stimulus check. 

Identity thieves may also call on the phone – as it is much easier to intimidate someone into giving personal information in conversation.  The “better” identity thieves can sound very authoritative, as if a representative of the IRS. 

Here’s the truth: if you filed a 2007 tax return you will receive a tax refund check, depending on your eligibility.  Your tax return includes your dependency status, number of children, social security number, and everything else required to process the stimulus check.  If you receive an email or phone call, it is just about guaranteed to be fraudulent. 

If you do receive one of these contacts, do your part and contact phishing@irs.gov to let the IRS know about it and stop the scam from affecting anyone else. 

Here’s a neat article that sparked an idea I hadn’t yet thought about - truth be told, my kids aren't yet college age, or even teen credit card age, so this is not something I have yet had to face, but will.  For all those parents who have kids entering college, or just leaving college, there may be no more useful gift than time with a financial planner.  I know, that sounds pretty dull.  IT seems like getting an eraser for a present, but it could be one of the better gifts you ever get.  

Every child – especially teenagers – likes to be independent.  Even if you have a stellar relationship with your kid, this sense of independence is inevitable…and healthy.  Kids like to rebel from their parents’ instruction.  Or at least not take their parents’ advice and carve out their own vision of the world.  When it comes to money, this can have terribly negative consequences.  

Say you sit down with your child and try to talk about issues involving savings and debt.  Is he or she going to fully absorb everything you’re saying?  You may show your frustration that your child isn’t listening, or have little faith that the young person will put these new ideas into action.  Sometimes a neutral third-party is needed – especially someone who is a much better authority on the subject than you could ever hope to be (unless your employed as a financial planner).  

Any young adult who is entering college or just leaving college could benefit from time spend with a financial planner.  Instead of potentially coming off as frustrated or condescending, a financial planner will carefully go over everything that person has to expect in the coming years regarding finances.  

A lot of times on this blog, I’ve implored parents to sit down with their kids and talk about the financial future.  If this hasn’t worked and your child is in financial dire straits, or if you want to avoid that eventuality, a short meeting with a financial planner could solve a whole host of problems.

Last week I wrote about how kids are getting sent pre-approved credit card offers and then actually be issued a card when the application is sent in.  In that entry I also wrote about a case where someone paid a bill with a ripped up/taped together cash advance check and the check was actually approved.  If this doesn’t look like a case of some derelict dumpster diving and then committing check fraud, then I don’t know what will.  

Here’s a site which shows something similar.  It would be funny if it wasn’t so alarming.   A guy went through a pretty ambitious experiment to see how wacky he could make his signature on a credit card receipt and still have the transaction processed.  The answer: he could write just about anything.  

He wrote the name Beethoven, a grid pattern, hieroglyphics, and finally culminated in the moniker, “I stole this card.”  Every time the transaction didn’t get a second look.  Now, I’m tempted to joke about this but it’s actually pretty serious.  What this proves is that anyone could use your credit card and easily get away with it.  Basically, retail clerks just don’t care about the card one way or the other.

In any list of ways to fight identity theft, one thing is always listed: sign your card.  This story proves that signing your card really means next to nothing.  It’s really important to have a card with a photo ID, but really this isn’t much security either.  If you can sign a receipt, “I stole this card,” what’s a picture ID going to do?  

So if you’re card is stolen or skimmed (a duplicate card made), a thief is going to have an easy time using it.  If it’s lost, you need to cancel it immediately.  You’ll never know if it’s been skimmed until you see fraudulent charges on your bill.  Sign up for both your card company’s credit monitoring program as well as third-party monitoring, which will catch this fraud in the act.  A retail clerk might not know the difference, but a credit monitoring service will think it’s mighty suspicious for a card to be used two places at once.  Even if you don’t use the card, you should check your bill to see that it hasn’t been used by anyone else.  

Click here for a good, low-cost monitoring service, and read up on credit monitoring at Experts on Credit.