Credit card companies have no doubt spent billions of dollars on advertising in order to get their credit card in a consumer’s wallet or purse. As a result, they have collected billions of dollars in payments from consumers on credit card balances and debt. Surprisingly, one credit card company decided to return some of that money to its cardholders this week. Only this time, rather than cash back rebates, frequent flier miles, or a no interest balance transfer to increase their use of plastic, they did so to get them to stop reaching for their credit card of choice.

Select American Express credit card holders will receive $300 to pay off the remaining balance on their American Express card by April 30th and close their account.

The city of Houston, Texas had a problem. They had $400,000 or so left over in their budget earmarked for efforts to rebuild the area from Hurricane Ike. Generally, extra money in the budget is a good problem to have. But given the nation’s real estate market and current economic climate, some people in the city wanted to put that money to work.

Houston Mayor Bill White proposed a plan to use the money to pay down some of the debt of prospective first time home buyers. Houston already has a program to provide down payment assistance to lower income home buyers in some neighborhoods which it would like to revitalize. However, some applicants’ credit scores fell just short of the number needed to qualify for the program. The solution to its problem of too much money in both programs: give the homebuyers’ money to pay down their debt and boost their credit score.

This week is America Saves Week. Since 2007, organizations have dedicated the last week in February to ending the near zero personal savings rate in the United States. Amid the concerns that America’s banks will have to be nationalized because they didn’t lend wisely, it is probably also a great week to celebrate the FDIC protection of personal bank accounts. The week is rolling already, as the economic crisis has jumpstarted savings in a way that the first two annual America Saves Weeks could not: the savings rate in the last three months of 2008 was the highest since 2001.

The timing of America Saves Week is interesting, to say the least. Two weeks ago, CNN Money ran on article on why saving is killing the economy. The federal government has just passed a massive economic stimulus package in order to make up for cutbacks in business spending. The national debt is growing at an enormous rate. And last year, the government sent out stimulus checks so that Americans could spend that money on goods and services.

President Obama announced his housing plan to avoid foreclosure of homeowners who are currently paying their mortgage but are not likely to be able to do so for long through little fault of their own. The program is also designed to stop foreclosure on homeowners who could afford a lower payment if they could get their mortgage refinanced at current market interest rates. The Obama housing plan is known as the Homeowner Affordability and Stability plan and is estimated to help 7 to 9 million people at a total cost of $275 billion.

Unlike current programs to prevent foreclosure, the Obama housing plan doesn’t require that the homeowner be behind on their payments to enter the program. And for homeowners qualifying under the foreclosure plan, the federal government also will make payments of up to $1,000 a year for five years toward the homeowner. That’s a $5,000 reduction in the principal of a mortgage for simply making your mortgage payment on time every month for the next five years!

JP Morgan Chase took action recently to cut off the supply of low cost credit it offered to consumers through promotional balance transfer rates.  I’m sure that we all remember the good old days when banks offered a low interest rate balance transfer at a fixed rate for the life of the balance of the [...]