Tulare County

Facts for Tulare County Consumers (Summer, 1996)

Credit Tips for Smarter Borrowing

Easily available credit can make living beyond one's means very tempting. The average debt load of American households has increased significantly over the past decade. Some households owe 20% or more of their net pay for consumer credit expenses (e.g., credit cards, car loans). Owing 20% of what you earn is equivalent to working for five days and only getting paid for four.

Even persons not experiencing financial difficulty may be paying more than is necessary for borrowed money. Two common financial errors are not obtaining the best credit terms available and carrying a debt balance that never goes away. Listed below are a dozen strategies to help you become smarter borrowers and cut interest costs:

1. List the total amount of consumer debt owed, i.e., all debts excluding a home mortgage. Along with the name of each creditor, note the original amount borrowed, the amount currently owed, the annual percentage rate (APR), the total finance charge, the number of months left to repay the debt, and the monthly payment. Making a master list of every debt obligation will help you see at one glance to whom and how much you owe.

2. Calculate your consumer debt ratio by dividing monthly consumer debt obligations by take-home pay. Then compare your debt ratio with recommended guidelines. For example, the Smith family has a monthly take-home pay of $1,800 and a $190 car payment. They also pay $200 monthly on credit cards. Their consumer debt ratio is 21.6% ($390 divided by $1,800). Experts recommend spending 10% or less of net income on consumer debt. Households owing more than 15% of net pay should reduce their use of credit and those owing more than 20% should stop charging immediately.

3. Select a credit card that best matches your debt repayment style. If you generally make minimum payments (or slightly above) and carry a balance from month to month, you should seek a credit card with a low interest rate. If you pay your bill in full, seek a grace period (a 20-25 day period where interest is not charged on new purchases if the entire balance is repaid) and no (or a low) annual fee. Cardholders who switch between making full payments and paying just the minimum should select cards with a low interest rate and a grace period. To obtain lists of low-interest and no fee credit cards, call Bankcard Holders of America at 703-389-5445 or RAM Research at 800-344-7714. Both companies charge a nominal fee for their reports.

4. Consider closing less attractive credit accounts. Reasons to do so include avoiding the extra expense, if you can get better terms elsewhere, and the fact that you can be rejected for an attractive credit deal if you have a number of open credit lines and are considered "credit heavy." Good candidates for closure include department store accounts that charge some of the highest interest rates around and credit cards that charge high fees for unneeded perks or benefits available elsewhere for free.

5. Beware of credit card cash advances. The effective annual interest rate is often 25% to 30% or more because few offer grace periods on cash advances, many charge cash advance fees (e.g., $2.50 per transaction), and higher interest rates are often charged on cash advances than on purchases.

6. Design your own debt repayment schedules by paying more than the minimum amount required. One example is the use of home equity loans for car purchases. Repay the loan over 3 to 5 years-NOT the banks's 15 to 20 year schedule. Another is a "do-it-yourself" bi-weekly mortgage. Simply divide a monthly mortgage payment (principal and interest) by 12 and add that amount to each monthly payment. This has the same effect as a bi-weekly mortgage, i.e., making 13 monthly payments per year.

7. Negotiate discounts from lenders. Many credit card issuers will reduce annual fees and/or interest rates upon request. The credit card market is saturated and creditors know that the only way they can maintain or increase market share is to lure away other cards' customers and keep their own from defecting. Before calling to negotiate better terms, role play your request with a friend to sharpen your negotiating skills. If you have other credit cards or pre-approved card offers, drop hints about switching to another unless your request is honored.

8. Avoid the use of credit for "disposable" items (e.g., supermarket purchases, vacations, fast food meals) if you usually carry a balance and pay interest on purchases. Otherwise, the debt will last much longer than the item or service purchased and cost a lot more. People also tend to buy more with credit cards. One study found that credit card users spent 34% more - on average - than those who paid cash.

9. Do not let credit card bills sit around for weeks until they are due. Instead, repay this debt quickly if they carry a credit card balance and the issuer uses the average daily balance method for calculating the balance upon which interest is charged. The average daily balance is used by most credit card issuers and is arrived at by calculating the outstanding balance for each day in the billing cycle. If a person pays their bill promptly - early in the cycle - this will decrease the average daily balance (and, hence, the interest charged) because there will be fewer days with a higher balance.

10. Prepaying the principal owed on a debt will reduce the length of the loan and the total amount of interest due. Many people are aware of principal prepayment as a strategy for reducing home mortgage debt but may not be aware that it can also be used for all types of debt (e.g., credit cards). Two resources to determine the amount of savings possible through principal prepayment are The Banker's Secret (for mortgages) and TBS Credit software (for credit cards) from Good Advice Press, Box 78, Elizaville, NY 12523.

11. Beware of home equity loans. For some people, borrowing against their home is too easy. A $20,000 home equity credit line has the same "temptation factor" as four gold bankcards with a $5,000 limit. Try to borrow against home equity lines only for the items that will increase their net worth (e.g., home improvements) or human capital (e.g., college tuition).

12. If you have debt problems, contact creditors immediately to negotiate a deferment of outstanding balances or reduced monthly payments. Another resource is the Consumer Credit Counseling Service (CCCS), which offers confidential budget counseling and debt repayment plans, negotiated with creditors and based upon clients' ability to pay. To locate the nearest CCCS office, call 1-800-388-2227.

Source: The Reporter, by Barbara O'Neill, Summer 1996.

Fruit Maturity and Ripening

Maturity at harvest is the most important factor that determines storage-life and fruit quality to the consumer. Immature fruits are more subject to shriveling and are of inferior quality when ripe. Overripe fruits are likely to become soft and mealy with poor flavor soon after harvest. Fruits picked either too early or too late in the season are more susceptible to physiological disorders and have a shorter storage-life than those picked at the proper maturity.

All fruits, with a few exceptions (such as pears, avocados, and bananas), reach their best eating quality when allowed to ripen on the tree or plant. However, some fruits are usually picked mature but unripe so they can withstand the postharvest handling when shipped long distance. Most are picked at a time which is a compromise between the level that would ensure the best eating quality to the consumer and that which provides the needed flexibility in marketing.

California's mandatory quality standards for most fresh fruits include indicators of maturity to ensure minimum acceptability of their flavor quality. Examples of the indicators are total solids, soluble solids, acidity, ratio of soluble solids to acidity and flesh firmness. Color is used as an index of maturity. Enforcement of these standards is the responsibility of the Agriculture Commissioner in each county.

Fruits can be divided into two groups: 1) fruits that are not capable of continuing their ripening process once removed from the plant and 2) fruits that can be harvested mature and ripened off the plant. The following are examples from each group:

Group 1: Berries (such as blackberry, raspberry, strawberry), cherry, citrus (grapefruit, lemon, lime, orange, mandarin, and tangerine), grape, lychee, pineapple, pomegranate, tamarillo.

Group 2: Apple, pear, quince, persimmon, apricot, nectarine, peach, plum, kiwifruit, avocado, banana, mango, papaya, cherimoya, sapote, guava, passion fruit.

As fruits ripen, they produce ethylene. Fruits in the first group produce very small quantities of ethylene and do not respond to further exposure to ethylene. These should be picked when fully ripe to ensure good flavor quality.

Fruits in Group 2 produce much larger quantities of ethylene in association with their ripening. Exposure to additional ethylene will result in faster and more uniform ripening.

If you want to quicken the ripening of fruits in this group, simply place them in a closed paper bag, not plastic, at room temperature. Check them every day to make sure none are getting too ripe and start to spoil. Bananas produce more ethylene than some of the other fruits. So, if you want to hasten the process even more, add a banana or two to the bag. Of course if you want to slow down the process leave the bag open and store at a cooler temperature. Place only fully ripe fruits in the refrigerator.

Source: Consumer Perspectives, July/August 1996.

Rating Nutrition and Health Information from Magazines

Many people read magazines for nutrition and health information. How good are magazines at providing reliable information? The American Council on Science and Health (ACSH) is a nonprofit, tax-exempt consumer education association. Since 1982 ACSH has conducted surveys to determine which of the popular magazines provided the most accurate information related to diet, nutrition and health issues. The last two surveys cover the years 1990 to 1992 and 1992 to 1994. According to these surveys, the following magazines provided good, generally reliable or excellent nutrition information: American Health, Better Homes and Gardens, Consumer Reports, Cooking Light, Glamour, Good Housekeeping, McCall's, Parents, Prevention, Reader's Digest, Redbook, and Woman's Day. Source: Electronic Food Rap, Vol. 6, number 27.

Kitchen: The Dirtiest Room in the House?

In May of this year, the American Society of Microbiologists met in New Orleans. One of the topics discussed was foodborne illness in the home. Scientists said that most of the salmonella poisoning happens in the home and that cross-contamination is believed to be the biggest cause of foodborne illness. In a recent study by the Lysol Corporation, the kitchen was found to be the dirtiest room in the house. The study found that there are more bacteria in the kitchen sink after dishes have been washed than there are in the typical toilet.

To prevent cross-contamination in your kitchen, practice the following recommendations:

• Always wash your hands thoroughly with soap and water before preparing food.
• Everything in the kitchen that comes in contact with raw meat, poultry or fish should be washed immediately to prevent contamination of other foods. Scrub countertops, knives and utensils with hot, soapy water, throw dish towels in the laundry and run cutting boards through the dishwasher. Plastic cutting boards hold up better in the dishwasher.
• Juice from raw meat, poultry and fish may leak and contaminate other foods in the refrigerator. Slip these foods in another plastic bag and secure with a twist tie.
• After cleaning the kitchen with soap and water, spray sinks and countertops with a solution of 1 tablespoon of bleach in a gallon of water. Leave wet for two minutes and allow to air dry. This reduces the number of germs to levels where disease transmission is less likely. This solution can also be used on plastic cutting boards. For wooden cutting boards, apply a solution made with three tablespoons of bleach in a gallon of water, leave wet for two minutes, rinse and allow to air dry.

Resource: Menopause and Osteoporosis - Choices for a Healthy Future

Menopause and Osteoporosis: Choices for a Healthy Future offers information on the prevention, causes, and treatment of osteoporosis. The 20-page booklet also answers questions on menopause, estrogen replacement therapy, calcium, osteoporosis, risk factors, and more.

To order a free copy of the brochure, call or write the National Osteoporosis Foundation; 1150 17th Street, NW, Suite 500; Washington, DC 20036-4603; phone (202) 223-2226.

Building Healthful Diets

Can the new food label help me choose foods for a healthful diet?

Yes. Food labels provide the information you need to compare foods and make informed food choices. Eating a variety of foods in moderate amounts is the key to balancing healthful food choices. It is the total diet over one or more days that counts. All foods can fit into a healthful diet.

Daily Values are reference numbers on the nutrition label. The Percent Daily Value (% Daily Value) gives a general idea of a food's nutrient contributions to the total daily diet.

You can use % Daily Value to compare foods and see how the amount of a nutrient in a serving of food fits in a 2,000 calorie reference diet. For example, you can use % Daily Value to see how much dietary fiber is in a serving of food compared to other food products and compared to a 2,000 calorie reference diet.

You can also use % Daily Value to see if your diet fits within current nutrition recommendations. Let's say you eat 2,000 calories a day. If your total % Daily Value for dietary fiber in all the foods you eat in one day adds up to 100 percent, your diet fits within the recommendations for fiber. Likewise, if your total % Daily Value for fat in all the foods you eat in one day adds up to 100 %, your diet fits within the recommendations for fat. The chart below shows the total % Daily Value for different calorie levels to see if your diet fits within current nutrition recommendations:

Can I use the label claims to choose foods to build a healthful diet?

Yes. Some food packages may make nutrient content claims, such as "fat free," "high fiber," or "rich in iron." These claims can only be used if a food meets strict government definitions. Even if a food makes label claims, it's a good idea to read the nutrition information label.

Source: NATIONAL FOOD PROCESSORS ASSOCIATION, in cooperation with FDA and FSIS.

1. True. Similar products have similar serving sizes. This makes it easier to compare products.
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2. True. The % Daily Value gives a general idea of a food's nutrient contributions to the total daily diet. The % Daily Value for total fat, saturated fat, total carbohydrate, dietary fiber, and protein (if listed) is based on a 2,000 calorie reference diet.
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3. True. Food labels provide basic information you can use to compare foods and make informed food choices.
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Cathi Lamp
Nutrition, Family and Consumer
Sciences Advisor

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Revised: June 20, 2003