Tuesday, November 15, 2011
Toys for Tots - Drop off your new, unwrapped toys, books and educational toys at any GCF branch between November 7th and December 9th. Tots for Tots also welcomes checks, made payable to "Toys for Tots", to purchase toys. Questions? Contact Tracy O'Connell at (856) 589-6600, x308 or firstname.lastname@example.org.
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How Do You Pay Your Bills?
Online banking wasn't much more than a pie-in-the-sky dream when we first started publishing GCFlash back in 1999. The tech world mused about its feasibility with the prophecy of how it would forever change the way future generations regarded money.
The predictions were correct. Today, I no longer need to draft several paragraphs to explain the benefits of online banking.
Online banking has surged this past year with 62 percent of all age groups preferring to conduct their banking electronically. That number stood at 36 percent just last year.
So I don't need to tell you how convenient it is to pay your bills online. You already know it saves you time and postage. It spares you the anxiety of forgetting to write a check, or delays in the postal system.
You already understand the environmental impact. In fact, if you receive your bills electronically as well, you can save even more trees.
By now, your desk is less cluttered. You've even found some peace of mind in knowing the all-important task of bill paying is under control.
Or have you? If you're using a bill pay product from a bank other than GCF, you still may be spending more time resolving issues than you do relaxing.
As an early user of GCF's bill pay system, I took its accuracy and convenience for granted. I no longer do.
I setup accounts at a local bank after leaving the Delaware Valley, using its product for local services. Big mistake.
Our community bank merged with a regional institution recently. The transition has not been pretty.
It was to be seamless on our part. Or so we were told. Account information, registered payees and scheduled payments would all migrate automatically. But to be safe, we were to double check the accuracy once the system came back online.
And I did. But where the previous bank used the scheduled date as when payment had to arrive, the new one used it as the date to make the payment. One of my creditors received payment a day late. I was hit with a $35 late charge.
There was no option on their website to question a completed transaction. An email sent to their general customer service address went unanswered. I had to opt through five layers of voice mail before getting to the bill pay department using their toll-free number.
The woman who took my call graciously listened to my 15-minute speech describing my problem along with my dissatisfaction of their customer service procedures. She asked a few questions, reviewed my payment history, acknowledged that this bill was scheduled to be processed four days before they sent it, and then told me she wasn't the right person to help. I had to start all over again with someone else who was not currently available. The voice mail I left has not yet been returned almost a month later.
I tried resolving this on the branch level, while knowing it isn't something they handle. Big mistake number two. I was rudely told that I can't prove it was their mistake and the most they would do is write a letter to the creditor explaining that a migration did truly occur. I'm still waiting for the letter.
In all, I spent nearly two weeks trying to resolve a $35 issue. The creditor had already reversed the late charge as it was my final payment and the first to arrive a day late. But now it was a matter of principle.
I did take the exemplary service and stress-free bill pay provided by GCF Bank for granted. But I no longer do.
This event would have never occurred with GCF Online Banker bill pay. It's easy to solve any issue that may arise.
Simply select the payee from the Pay Bills list in Online Banker Payment Center. You'll see the two previous payments listed along with any scheduled pending payment. Click on the payment amount displayed for any recent transaction to see its details. You'll learn exactly when the payment was made and when it was received by the payee.
Instantly you'll know which end caused any glitch, and who you need to contact for resolution. Should it have been a bank error, simply click the link to initiate a payment inquiry. It's as easy as that.
Mistakes happen. They're an unavoidable part of life. What's important is how willing the responsible party is in offering resolve. My local bank did not do that, and I'm now in the process of migrating all of my bill pay services to GCF Bank.
Folks tend to be reluctant in making this kind of switch. Once you're setup with an institution, you want it to proceed on auto-pilot. So try moving over just a couple of payments to GCF Bank. See for yourself which product is best for you. Making the switch will be much easier when you know how much you have to gain.
Part D: Time to Choose
Medicare's open enrollment period started early this year, and will end earlier as well. For 2011, it began on October 15th and ends at midnight December 7th.
Coverage begins on January 1, 2012 for those changing plans. Those keeping their current plan will automatically roll over.
It's Part D we'll discuss here. That's your prescription drug coverage. And there is a lot to know.
Medicare beneficiaries become eligible for Part D along with other program components starting three months before their 65th birthday. Those who enroll more than three months after their 65th birthday or miss open enrollment must pay a late-enrollment penalty equal to 1 percent the national average premium times the number of full calendar months they were eligible but not enrolled.
There are exceptions to this penalty. Those with access to drug coverage through their job, active or as a retiree, that's equal to a Part D plan can defer enrolling without penalty. Check with your plan administrator to learn if your plan qualifies.
Part D plans can change costs and coverage each calendar year. Changes to your current plan would appear in the "Annual Notice of Change" you should have received in September.
Plans vary widely. Some monthly premiums will rise, others will fall. Some may no longer cover a medication you are currently taking.
Comparing monthly premiums should only be a small factor in your choice of plans. Co-payments typically account for a larger portion of your out-of-pocket costs. Some plans have a fixed co-pay, others a percentage of the drug's cost. This makes a huge difference if you're taking a higher-priced drug.
Medicare offers a calculator to help you do the math on their website. Enter your zip code, the names of the drugs you take along with their dosages and how often you take them. The program returns the name of plans in your area that cover your drugs at the least out-of-pocket cost to you.
Medicare's plan finder also rates plans on service quality so you can determine its true value. And it tells you which offer nationwide pharmacies for frequent travelers.
The coverage gap known as the doughnut hole remains 50 percent in 2012. But the government discount for generic drugs goes up from 7 to 14 percent.
As the law currently stands, Part D enrollees will pay an average of 25 percent of the cost of medications until you and Medicare together have spent $2,930. That's where you enter the "doughnut hole."
At that point, enrollees pay 50 percent of the cost of brand name drugs and 86 percent of the generic cost until $6,658 is accrued between you and Medicare. You then qualify for catastrophic coverage where you only pay 5 percent for the remainder of the year.
Certain popular, expensive drugs will go generic in 2012. These include Lipitor, Plavix and Zyprexa. A drug can be produced in a generic version after the initial patent expires 20 years after invention. The original, brand name version usually retains its high price. But the generic versions offer a substantial savings.
Part D's Extra Help program subsidizes coverage for those in need. Eligibility requirements have changed. If you applied previously but were turned down, try again. This program is coordinated with Social Security. Apply on their website.
The Federal Reserve's "Dual Mandate"
Currently, the Federal Reserve has two stated goals mandated by legislation: Price stability and full employment. Actually, the original Federal Reserve Act passed in 1913 had no macroeconomic objectives, it simply instructed the Fed to avert financial panics and bank runs by loaning money to the banking system. This was sorely needed at the time, as the periods prior were fraught with booms, busts and panics. For long-term prosperity to occur, consumers, investors and, yes, bankers had to have faith in a system with predictability and recourse. The Federal Reserve created that environment. And to those who now call for the abolishment of the Federal Reserve, I would ask to study the period prior to its creation. Abolishing the currency, the military or the legal system are no more loony ideas.
Yet it wasn't until immediately after WWII that the 1946 Employment Act required the existing Federal Reserve to "pursue conditions under which there will be afforded useful employment opportunities for those able, willing and seeking work, and to promote maximum employment, production and purchasing power."
Lofty goals - why not throw in World Peace! Yet the Fed did pursue such goals and the United States entered into the longest period of prosperity known to date. Investments could now be longer term, as there was some confidence that money and other assets accumulated would have a recognizable value at a later time. This may sound trite, but prior to WWII, very, very few Americans saved for retirement. Now it was actually possible for the average American to accumulate wealth.
By 1978, Congress passed the "Full Employment and Balanced Growth Act" which required the Federal Government (including the Fed) to "promote full employment and reasonable price stability." By then, it was widely agreed by economists that "full employment" does not equate to 100% employment. And "price stability" does not equate to zero inflation. Too much of anything is usually not a panacea. Most economists agree that full employment equates to about 95 percent employment. And price stability equates to a very low, but not zero rate of inflation, perhaps two or three percent.
Why? For the labor market to function and companies to have a pool of new workers, there must always be a small group of workers seeking employment (although currently "unemployed"). There will also always be a group of workers "in between jobs," no matter how briefly. So some unemployment is desirable.
Similarly, some inflation has been necessary to raise the overall level of asset values over time. There is much empirical evidence to indicate that these two indexes are indeed closely correlated to rising living standards and prosperity. Former Federal Reserve Chairman Alan Greenspan, who keenly understood this, once referred to this relationship as "a delicate dance."
So has the Federal Reserve been successful? Based upon the empirical evidence of growth and prosperity since its creation one would have to state an astounding YES. The business cycle has been muted, to be sure. Eliminated? No. Muted. Yes. That does not mean the Fed hasn't made mistakes. Even Greenspan acknowledges, with the benefit of hindsight, that his Fed should have raised interest rates much more quickly in the 2004-2007 timeframe in order to dampen the housing bubble. Greenspan got caught up in his own coined "irrational exuberance."
Yet imagine where we might be today if housing prices had simply leveled off for an extended period of time as opposed to the rapid rise we experienced followed by the dramatic collapse shortly thereafter - a fact now etched in history. Had the former occurred, it is probable that the term "Great Recession" would not be in our vocabulary today. Similarly, the Fed's foolish tightening of the money supply during the Great Depression is now widely accepted as having been at least partly responsible of the depth and duration of that terrible period. However, in the vast majority of periods over the last century, the Fed has done a fairly good job at the delicate dance and most Americans have consequently experienced relatively prosperous times. And for that, you should thank your Federal Reserve.
During a recent speech, Philly Fed Senior Economist Paul R. Flora, no right winger for sure, stated that the Fed's fairly drastic action to shore up the financial system during the recent crisis averted something much, much worse. Those who have studied the available empirical evidence have to conclude that judgment to be correct.
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