If the federal government follows through on plans to send many taxpayers rebate checks in the coming weeks, would you put that cash in the bank or buy a new TV? Karen Atwood, CEO of the Consumer Credit Counseling Service of Northeastern Iowa, urges people to put plans for a wild shopping spree out of their heads and instead, use the money wisely.
"First of all, you want to stop and do some analyzing. I realize, it’s only $800 and you have a lot of needs," she says, "look at your most pressing need. How is your utility bill sitting right now? How is your house payment? Try to take care of some of those basics. Actually, try to put away some of it for later on down the road."
While it may be hard to resist the urge to blow the rebate money, she says the smart thing to do is save. Atwood says, "Don’t spend all of it this week, even if you have great needs, hold onto it because, unfortunately, a greater need always seems on the horizon."
In addition to the possibility of rebate checks, the Federal Reserve Board made deep cuts in its lending rate this week, another effort to stave off what many analysts believe is a looming recession.
Atwood says she’s encouraged by the actions she’s seeing in Washington, but would like to see more action. Atwood says, "What would really help is if the federal (government) got on board and stopped these credit card companies from increasing the interest rate on people. The law that went into effect about a year ago, where if you miss one payment, everybody else can look at your credit and increase their interest, is driving more and more people to our doors."
The counseling service saw a record of nearly 6,000 clients last year, almost triple the norm, and 81% of the people were either in bankruptcy or headed for it. The agency is headquartered in Waterloo, with offices in Dubuque, Mason City, Ames, Marshalltown, Grinnell, Forest City, Decorah and Cedar Falls.