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We’ve often written about the fortunes trapped in the wallets of consumers who carry around gift cards for months.  In many ways, this is almost as bad as getting large tax refunds every year.

What makes this practice especially dangerous is what happened Friday.  Home furnishings giant Linens ‘n Things announced they were filing for bankruptcy protection.   That filing is a danger sign, but not especially problematic. The true problem came in the details of the filing when the company said that it would close 120 of its less than 600 stores.  About 15% of those stores are in California.

What does that mean for you?  If you’re in a California community with a Linens ‘n Things store due for closing, you might find some amazing deals.  After all, it is cheaper to sell products at a deep discount than to pack and move them.

But don’t hesitate.  You may very well find that the store in your town and surrounding towns is closed before you know it.

Reminder:  The email function on this blog is in the top right corner.  Be sure to send this to anyone to whom you’ve given a Linens ‘n Things gift card or someone you know who has one.  Smart consumers stay aware of trends, and gift card holders need to know if and when their local store is closing.

Posted under Finance

The Federal Reserve’s Open Market Committee yesterday increased the interest rate banks charge each other for overnight loans from 2.25% to 2.5%. Many banks have responded by increasing the prime rate they charge business customers, and that has an impact on many consumer rates.

“Financial obligations like credit card rates tied to the prime rate should result in increased consumer rates within one billing cycle,” predicts Consumer Help Web president Joan Bounacos. “These rates have been at historic lows for so long that many consumers may not have factored the cost of carrying loans into their budgets. Now is the time to start planning because most economists are forecasting that rates will continue to increase slowly.”

A report in today’s Washington Post predicts “…the Fed[eral Reserve will raise the rate again by a quarter-point at each of the next two scheduled meetings, in March and May.” The paper also states that economists believe that the rate could rise an additional 1.5 percentage points during 2005.

Posted under Finance