RISMEDIA, September 28, 2010—(MCT)—Consumers go about their daily lives believing certain things about money and repeating conventional wisdom that just isn’t true—and it could be costing them. Here are some common myths related to money that, once dispelled, might save you some.
Myth: Rinse dishes before placing them in the dishwasher.
Reality: Your dishes won’t get any cleaner, according to tests by Consumer Reports. Just scrape off excess food into the trash or garbage disposal. Another reason not to pre-rinse is the detergent doesn’t have any grease or grime to stick to. So detergents attack dishes instead, making them appear cloudy, scratched or etched, according to the Whirlpool Institute of Kitchen Science. Rinsing in the sink wastes water and energy because you’re probably using heated water.
Myth: Paying off an old debt will help my credit score.
Reality: True, but not immediately. A collection item on your credit report is regarded as seriously negative, whether it is paid or unpaid, said Gerri Detweiler, personal finance adviser for Credit.com. Settle the debt for less if you can. Almost all bad marks on your credit report remain for seven years, except personal bankruptcy, which lasts for 10 years, according to Credit.com. One exception: if you can talk your creditor into removing the negative mark from your credit report if you pay in full. Creditors are not supposed to do that, but it’s done, Detweiler said. Removing it will help your credit rating.
Myth: Everyone needs life insurance.
Reality: Not necessarily. The primary use of life insurance is to protect your income. If nobody depends on your income, and wouldn’t be financially distressed if you died, you might not need it, says Amy Danise, senior managing editor of Insure.com. Children, single people, retired people, wealthy people and even dual-income people without children might not need life insurance. “Why pay premiums for something you don’t really need?” Danise said. However, you might want life insurance for other reasons, such as providing an inheritance to children or donating to a charity.
Myth: Ceiling fans help cool a room.
Reality: Ceiling fans don’t actually cool the air. They create a wind chill that keeps skin cool. So don’t bother using a fan in an empty room, says the U.S. Department of Energy’s EnergyStar program. Using fans is a cheaper way to keep you cool only if it allows you to use less air conditioning.
Myth: Earlier the better, when it comes to holiday gift shopping.
Reality: Shopping too early probably is a bad idea. Stores generally honor after-Christmas returns for purchases made Nov. 1 or after. If the receipt is dated earlier, the recipient might not be able to return or exchange the gift for a different size or model, said Christine Frietchen, editor-in-chief of Consumersearch.com, a site that compiles product reviews.
Myth: More coils means a better mattress.
Reality: A queen-size mattress with at least 390 coils has plenty, says Consumer Reports. Even mattress companies say the most important buying tip is to actually lie on the mattress to determine if it’s comfortable to you.
Myth: Red cars cost more to insure.
Reality: “It’s simply not true,” Danise said. “Color is not a factor in your car insurance rates.” If you have sky-high rates on your new red sports car, the rate increase is “sports-car specific, not color specific,” she said.
Myth: If I pay at least something toward my credit card debt, I’m not late.
Reality: Wrong. Unless you pay at least the minimum payment on time, you’re late and risk being reported to the credit bureaus, said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. Black marks on your credit record can damage your ability to borrow money, get low insurance rates and even get a job. “They feel that they are showing a good faith attempt to pay by sending in whatever amount they can afford,” Cunningham said. “I don’t think they realize the ramifications of doing so—at least not at first.”
Myth: Someone can take out a life insurance policy on me without my knowledge.
Reality: “Secret insurance policies are a huge urban myth for insurance,” Danise said. “It’s almost impossible to do without the insured person knowing.” That’s because the insured needs to take a medical test and sign paperwork to release medical records.
Myth: Store alkaline batteries in the refrigerator or freezer to prolong their life.
Reality: Not required or recommended for batteries produced today, say Energizer and Duracell. In fact, humidity from cold temperature storage can harm batteries. To maximize performance and shelf life, store batteries at normal room temperatures with moderate humidity levels.
(c) 2010, Chicago Tribune.
Distributed by McClatchy-Tribune Information Services.
