NYC mayor: Plane, chopper crash 'not survivable'

NEW YORK — A tour helicopter carrying Italian tourists collided with a small plane Saturday over the Hudson River, and authorities believed all nine people aboard the two aircraft were killed.

The accident, which New York City Mayor Michael Bloomberg called "not survivable," scattered debris into the river and onto the Hoboken, N.J., waterfront. It happened just after noon between Manhattan and Hoboken on a crystal clear summer day.

Two bodies were recovered in the water, one floating free and one in the wreckage. Other bodies have been spotted in the debris. The crash victims included five Italian tourists and a pilot on the helicopter and the three people on the plane, including a child, Bloomberg said.

"This is not going to have a happy ending," Bloomberg said. He said he thought it fair to say "this has changed from a rescue to a recovery mission."

The plane, a Piper PA-32, took off from Teterboro Airport in New Jersey, and the helicopter was a Eurocopter AS 350 owned by Liberty Helicopters, a sightseeing and charter company, the Federal Aviation Administration said. Liberty offers sightseeing and helicopter charter flights in the New York City region.

The mid-air collision was the fifth crash involving Liberty Helicopters since 2001, according to National Transportation Safety Board accident reports. No one was seriously hurt in any of the previous accidents. The company has had more accidents on sightseeing flights than any of its competitors, NTSB records show.

The plane was headed to Ocean City, N.J., FAA spokesman Jim Peters said. The helicopter had just taken off from a heliport on Manhattan's West side.

People who saw the crash and its aftermath described the two aircrafts colliding not far from the Hoboken shoreline, and said the impact sheared off the plane's wing.

"There was a loud pop, almost like a car backfire," said Buzz Nahas, who saw the crash from Hoboken. "The helicopter dropped like a rock."

Katie Tanski, of Hoboken, heard the noise of the collision, looked up and saw chaos in the air.

"We saw the helicopter propellers fly all over," she said. Some pieces of the wreckage fell on land, sending Tanski and others scurrying for cover.

Seven months ago, the same river was the scene of a spectacular aircraft accident that resulted in no loss of life. In January, a US Airways flight taking off from LaGuardia Airport slammed into a flock of birds and lost power in both engines. The plane crash-landed in the Hudson River, and all 155 people on board were pulled to safety.

A person who answered the phone at a Liberty Helicopters office declined to comment on the accident, but said the company would be releasing a statement.

The company runs sightseeing excursions around the Statue of Liberty, Ellis Island and Manhattan at costs ranging from $130 to about $1,000. The firm's website had flights of various lengths. The longest flight, lasting 22-25 minutes, is called "Romance Over Manhattan," said the website.

A Liberty helicopter struck another chopper while attempting to take off from a heliport at West 30th Street in New York, N.Y., on March 22, 2008. None of the four passengers or the pilot were injured on the sightseeing flight.

In another accident, a Liberty helicopter crashed Sept. 19, 2008, in Linden, N.J., during a training flight. Neither pilot was injured, the NTSB said.

In one case on July 7, 2007, a Liberty Eurocopter EC130B4 lost power over the Hudson River and made an emergency landing in the water. The pilot and all seven passengers, who were wearing inflatable life vests around their waists, escaped without injury, the NTSB said.

The NTSB has not yet concluded what caused the accident.

On June 14, 2001, a Liberty helicopter struck trees in darkness and fog in Hopewell, N.J., the NTSB said. The safety board found that the pilot was at fault for continuing the flight into poor weather. The pilot and six passengers aboard the charter flight received minor injuries.

Contributing: Alan Levin, USA TODAY, in Washington; Associated Press

READ MORE - NYC mayor: Plane, chopper crash 'not survivable'

Some short-term credit union loan rates may be high

You need money, and you need it fast. You've already pawned your saxophone. Friends with money won't return your calls.

One option is to get a payday loan, a short-term loan against your next paycheck. Payday lenders typically don't require a credit check, making them an easy source of quick cash. But annual interest on these loans often runs as high as 400%, and many borrowers who use payday loans to meet a short-term cash crunch end up with long-term debt.

An alternative is a loan from your credit union. In recent years, many credit unions have launched short-term loans for their members. The products were created in response to concerns that many low-income credit union members were relying heavily on payday loans.

Ideally, a credit union loan should offer a low-cost alternative to a payday loan, and many do. But before you sign up, scrutinize the details. Some credit union loans "are only marginally cheaper than traditional payday loans," says Lauren Saunders, an attorney with the National Consumer Law Center. Other credit unions have lent their names to third parties that are offering payday loans, the NCLC says.

The NCLC cited several examples of what it believes are high-cost credit union loans, including:

•Kinecta Federal Credit Union in Manhattan Beach, Calif., claims to offer short-term loans with a 15% annual percentage rate, but charges fees that raise the effective APR to 275%, the NCLC says.

In an e-mail, Kinecta spokeswoman Laura Oberhelman said the credit union's loan is competitively priced and in compliance with federal regulations governing such loans. In many cases, Oberhelman said, a short-term loan is less costly than paying overdraft fees on a checking account or re-establishing service with a utilities provider.

Kinecta also offers borrowers a free savings account in an effort to wean them from payday lending, Oberhelman said.

•The GoodMoney loan developed by Prospera Credit Union of Appleton, Wis., charges a fee of $9.90 per $100 for a 14-day loan, which works out to an annual APR of 252%, the NCLC said.

The GoodMoney loan differs from traditional payday loans because borrowers who can't repay the balance in two weeks can work out a plan to stretch out the payments, says Prospera CEO Ken Eiden. "Maybe you pay $500 over 10 weeks instead of the usual one or two weeks," he says. That program, he says, keeps customers from falling into a cycle of debt and teaches them how to manage money.

If you need money, and your credit union offers a short-term loan, here are some things you should consider:

•The loan terms. Most payday lenders require borrowers to repay the entire balance, plus fees, when they receive their paycheck. That's a problem, because most borrowers can't repay the entire balance in such a short time, says Lois Kitsch, program director for the National Credit Union Foundation, the charitable arm of the credit union industry. Borrowers often roll the balance into a new payday loan.

Kitsch says consumers should be wary of loans requiring them to repay the balance within a short period. Many credit unions give members 30, 60 or even 90 days to repay loans, she says. Virtually all credit unions that offer short-term loans prohibit rollovers, according to the NCUF.

You should also determine whether your credit union will let you make installment payments if you can't pay the balance by the due date. The NCLC recommends that credit unions give borrowers this option to protect them from rollovers and multiple application fees.

•The loan cost. Some credit unions claim that they charge 0% interest on their short-term loans. However, application and other fees can push the effective APR into the triple digits, according to the NCLC, which has recommended capping the annual interest rate for payday loan alternatives at 36%, including fees.

•Savings features. Some credit unions tie their payday loan alternatives to financial education programs in an effort to help members stay out of debt, Kitsch says. For example, many credit unions that offer payday alternatives require borrowers to deposit 5% to 10% of their payments in a savings account, she says. Their hope is that eventually, you'll have enough money put aside to cover emergencies, eliminating the need for a loan from your credit union, Eddie's EZ Cash or friends who'll return your calls.

READ MORE - Some short-term credit union loan rates may be high

Frugal folk can raise strategy shields as credit card fees jump

Americans have a complex relationship with credit cards.

They love the convenience of plastic, especially if they need to rent a car or bail an errant relative out of jail. But they detest many credit card company practices, such as raising interest rates for no reason, lowering credit limits or slapping on hefty fees.

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These practices have increased in recent weeks as credit card issuers prepare for a series of reforms that will take effect in February. Among other things, the new law will limit when issuers can raise rates on existing debt. In the interim, many issuers are raising rates and fees for some of their customers. Some tips on how to cope:

If you're carrying a balance:

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•Do the math before transferring your balance to a low-rate card. Several card issuers are still offering a low introductory interest rate for customers who transfer their balances. But they've also raised their balance-transfer fees, which will eat into the amount you save. For example, Chase plans to raise the maximum balance transfer fee on some of its credit cards to 5% from 3%.

Some credit card issuers cap the maximum amount they'll charge customers to transfer their balances. USAA, for example, caps the fee at $75, according to Bankrate.com's 2009 credit card survey.

But many others don't cap balance-transfer fees, which can lead to substantial charges for customers who transfer large balances, says Ellen Cannon, managing editor for Bankrate.com.

Depending on the size of your balance, "There are still scenarios where balance-transfer deals can work for you," says Curtis Arnold, founder of CardRatings.com. Some credit card issuers are still offering a 0%, 12-month introductory rate, but you need excellent credit to qualify, he says.

•Don't be afraid to negotiate. If your rate goes up, call the credit card issuer and ask for a better deal.

If you always pay on time, pay more than the minimum and have never exceeded your credit limit, there's a good chance your credit card issuer will lower your rate, Cannon says. "They don't want to lose their good customers."

If you don't carry a balance:

The easiest way to avoid higher interest rates is to pay off your balance every month. But even customers who don't carry a balance are vulnerable to stealth fees, according to Bankrate.com. What to watch out for:

•Fees for exceeding your card limit. Many credit card issuers have lowered customers' available credit, increasing the likelihood that you'll inadvertently exceed the limit.

Over-limit fees range from $15 to $39, with some issuers tying the amount of the fee to the amount by which you exceed your limit. Starting in February, banks will be required to get customers' permission before allowing them to make purchases that exceed their limits.

In the meantime, the best way to avoid triggering over-limit fees is to set up online accounts for your credit cards and review them every day, says Adam Levin, founder of Credit.com.

Reviewing your accounts, he says, "brings you face to face, sometimes unpleasantly, with how much you're spending and what you're buying, and how close you might be coming to that magic credit limit line for that particular card." It's also a good way to protect yourself against identity theft.

•Different grace periods. Read the fine print on your credit card statement to find out how much time you've got to pay your bill before triggering finance charges and late fees. In the Bankrate.com survey, grace periods ranged from 20 to 25 days.

Even paying a day late could trigger fees of up to $39, according to Bankrate.com. Want to avoid late fees by making a payment by phone? If you talk to a human being, most issuers will charge you about $15, Bankrate found.

Watch your mail

You probably get a lot of mail marked "very important" that turns out to be junk. But if you receive official-looking notices from your credit card issuer, open them and read them, says Ruth Susswein, deputy director of national priorities at Consumer Action, an advocacy group.

This may be the only notice you get that your interest rate is going up, or that your issuer has increased the minimum you must pay on your balance every month, she says.

Read the material carefully, "even though it's painful to look at," she says. "The smaller the print, the more important it is."

READ MORE - Frugal folk can raise strategy shields as credit card fees jump

Fed up with your bank's fees? How to move your accounts

At first, it seemed like the perfect match. Thoughtful gifts. A smile every time you walked in the door. An occasional note thanking you for, well, just being you.

But like so many romances that looked promising at first, your relationship with your bank has soured. You've been ground down by ATM fees, overdraft charges and penurious earnings on your so-called interest-bearing checking account. You're angry and you want out. But breaking up with your bank can be messy and expensive, especially if you use direct deposit, online bill payment and similar automatic services.

Because of the hassle, most consumers don't switch banks unless they move to another part of the country, says James Van Dyke, president of Javelin Strategy and Research. Every year, only about 11% of bank customers change their bank accounts, he says.

While consumers often complain about fees and services, Van Dyke says, "It takes dynamite to remove them from their bank."

However, attitudes may be changing. While the overall percentage of bank account switchers remained about the same during the first quarter, 44% cited higher fees as the reason for the change, up from 36% for the past 12 months (see box), according to a Javelin survey. Only 8% cited a move as the reason for the change, vs. 26% for the past 12 months.

The findings suggest that consumers who have long complained about fees and services "are getting up and walking away," Van Dyke says.

Banks have given them plenty of reason to leave. Average ATM and bounced-check fees continued to soar last year, according to Bankrate.com. Banks have also made it easier for consumers to overdraw their accounts with checks, ATMs and debit cards, triggering hefty overdraft fees. Meanwhile, the average interest-bearing checking account is paying less than 1%.

In this tight-fisted economy, there's no reason to pay more for banking services than necessary — especially when there are so many banks and credit unions vying for your affections. Some community banks and credit unions are offering interest rates of 4% or more on checking accounts if you meet certain requirements, such as using your debit card at least 10 times a month. You can find more information about rewards checking accounts at checkingfinder.com or bankdeals.blogspot.com.

How to orchestrate a painless breakup:

•Take advantage of "switch kits" offered by some banks and credit unions. These kits, typically available online or at bank branches, provide all the forms you need to change direct deposits and automatic payments. They also contain forms you can send to your old bank and other institutions, informing them that you're closing the account.

•Leave a cushion in your old bank account to cover outstanding checks or debits. You're probably not going to forget to change your mortgage payments, but you might overlook the monthly debit for your Netflix subscription, or the quarterly deduction for your health club dues. For that reason, it's a good idea to leave your old account open for at least three months, says Marc Hedlund, chief executive of Wesabe, an online money-management service. Every time you get an automatic payment on the old account, switch it to the new one, he says.

What you want to avoid is having payments hit your bank account after it's been closed. Some companies will send a bill that has bounced back to a collections agency, Hedlund says.

•Set up online accounts for your new and old bank and monitor them frequently. That will make it easier to determine whether your employer, mortgage lender and other businesses you deal with have switched over to your new account, says Bill Hampel, chief economist for the Credit Union National Association. You can also use your online accounts to move money between your new and old account as needed, he says.

If you have money in a savings account, Hampel adds, it's not a bad idea to deposit some of it in your old bank account temporarily, just in case there are some outstanding checks or debits you've forgotten about.

•Don't burn bridges with your old bank. Your ex may need to get in touch with you weeks, or even months after you close your account, so make sure it can find you. If you move or get a new phone number, notify your old bank in writing. Don't rely on a phone call.

READ MORE - Fed up with your bank's fees? How to move your accounts

When settling credit card debt, watch out for scams

ou snicker when you hear an ad for a pill that will vaporize belly fat. You scoff at suggestions that you can work at home and earn more money than Warren Buffett.

But when you hear about a program that promises to significantly reduce your credit card debt, you wonder: Do these debt-relief services really work?

Debt-settlement companies typically try to negotiate with credit card companies to reduce the amount you owe. Rising unemployment has led to a sharp increase in the number of consumers who are behind on their payments, creating a receptive audience for their services. But like a weight-loss product that causes you to gain 10 pounds, some of these programs could leave you even deeper in debt.

Federal and state regulators have brought a number of actions against debt-relief companies for misleading and deceptive practices.

Last week, Chase Card Services, a division of JPMorgan Chase, said it will forgive the debts of more than 13,000 credit card holders who were allegedly defrauded by a Florida-based group of debt-settlement companies.

The settlement stemmed from a lawsuit brought by Florida Attorney General Bill McCollum against the companies. The lawsuit alleged that customers were told to stop sending monthly payments to their credit card companies and send the money instead to the debt-settlement firm, which promised to reduce debts to pennies on the dollar. Instead of sending the money to credit card companies, the lawsuit alleged, the group used it to pay attorneys' and processing fees.

For some borrowers with large debts that can't be repaid within three to five years, a reputable debt settlement company may offer an alternative to bankruptcy, says Gerri Detweiler, credit adviser for Credit.com, a consumer site. Legislation enacted in 2005 has made it more difficult for some individuals to file for Chapter 7 bankruptcy, which eliminates most debts. Chapter 13 bankruptcy requires you to agree to make up to five years of court-ordered payments, and you may be required to surrender some assets.

Still, bankruptcy offers more legal protection than debt settlement: While you're filing for bankruptcy, your creditors can't file lawsuits or harass you. "I would never suggest someone go into debt settlement unless they've met with an attorney, and the attorney concurs that bankruptcy may not be the best option," Detweiler says.

If you decide to pursue debt settlement, watch out for red flags. Warning signs:

•The company charges a large upfront fee. Many of the debt-relief companies targeted by federal and state regulators demanded thousands of dollars in fees and never delivered on promises. If a company gets most of its payment upfront, Detweiler says, "They don't have much incentive to do a good job for you." Ideally, fees should be tied to results.

•The company claims that debt settlement won't affect your credit report. Not true. While successful debt settlement will reduce the amount you owe, "Your credit will be significantly damaged," Detweiler says. "If you're weighing bankruptcy vs. debt settlement from a credit report standpoint, there's not much difference."

•The company claims it can protect you from lawsuits. "While creditors do settle debts every day, it's an adversarial process," Detweiler says. "You could be sued."

•The company claims it can eliminate all of your debts. These companies provide, for a fee, a document that purports to absolve the consumer from credit card debts because the original line of credit was illegal. Consumers who fall for this scam end up with higher debts, ruined credit and calls from a collection agency.

There are low-cost alternatives to debt settlement. Call your lenders and see if they're willing to negotiate with you directly.

Another option is a non-profit credit counseling agency, says Chuck Bell, programs director for Consumers Union. A credit counselor may be able to negotiate a debt-management plan with your lenders that allows you to repay your debt over time, sometimes at a lower interest rate.

You can find a credit counselor in your area at www.debtadvice.org, the website for the National Foundation for Credit Counseling, or www.aiccca.org, the website for the Association of Independent Consumer Credit Counseling Agencies.

Ideally, Bell says, "You're going to get an independent source of advice, not somebody who is going to profit from your misfortune."

READ MORE - When settling credit card debt, watch out for scams

Earlier notice on rate hikes gives credit card users options

Here's another good reason to pay attention to mail from your credit card company: You could soon receive a notice that the interest rate on your credit card is going up. That's the bad news. The good news? Well, there isn't much, but how about this: You may actually have time to figure out what to do about it.

Within the next few weeks, credit card issuers will be required to give borrowers at least 45 days' notice before making a significant change in their interest rates or fees. The heads-up requirement is included in a credit card reform bill President Obama signed in May. Most provisions in the Credit Card Accountability, Responsibility and Disclosure Act don't take effect until next year, but the advance-notice requirement kicks in on Aug. 20. Previously, credit card issuers could raise rates with just 15 days' notice.

There are some exceptions to this requirement. If your card's interest rate is tied to the prime rate or similar benchmark and that benchmark changes, your issuer doesn't have to give you advance notice, says Ben Woolsey, director of marketing and consumer research for CreditCards.com. However, Woolsey says, issuers will be required to give you 45 days' notice if they increase the margin, which is the amount added to the benchmark index to calculate your annual percentage rate.

In the past, consumers have complained that by the time they learned about a rate increase, they didn't have time to do anything about it, says Gerri Detweiler, credit adviser for Credit.com. "This will give consumers a little longer to sort out their options if they get a notice of a change in terms," she says.

Your best bet, of course, is to pay off your balance before the rate increase. If that's not possible, you have two choices:

•Repay your balance at the higher interest rate. If you have a small balance and the rate increase is modest, this may not cost you much. And if you have other credit cards with lower rates, you can use them for future purchases.

Many borrowers, though, aren't dealing with modest increases. While the law requires issuers to notify borrowers of a rate increase, it doesn't cap the amount. And in advance of more stringent rules that will take effect next year, many credit card issuers are imposing significant increases in borrowers' rates.

•Opt out of the rate increase. The law requires issuers to give borrowers the option of paying off their existing balance at the old rate. Typically, once the balance is paid off, your credit card issuer will close your account, says Curtis Arnold, founder of CardRatings.com.

Since you're probably already ticked off at your credit card issuer for jacking up your rate, opting out and parting ways may seem like a sensible and satisfying choice. But before you head down this path, it's important to understand how it could affect your credit score, Arnold says.

One of the factors used to calculate your credit score is what's known as the "credit utilization ratio," which is based on the amount of credit you have outstanding as a percentage of your total available credit. For example, if you have $10,000 in available credit and owe $2,000, your credit utilization ratio is 20%. Keeping your utilization rate low helps your score.

When you close a credit card account — or your issuer closes it for you — the amount of your total available credit shrinks, which could lead to a higher utilization rate, says Craig Watts, spokesman for Fair Isaac, developer of the widely used FICO score.

Watts adds, however, that the impact of closing an account varies, depending on the individual. If you have low balances on your other cards, closing one account isn't going to shift your utilization rate enough to affect your score, he says. If you have a lot of outstanding debt, though, closing one account could change your utilization ratio enough to lower your credit score, he says.

Before deciding whether to opt out or stay in, get out a calculator and figure out how much the new interest rate will affect your monthly payments. If you're trying to make ends meet and face a big increase in your monthly payments, you should seriously consider opting out, says Bill Hardekopf, chief executive of LowCards.com.

Once you've paid off your balance, you can focus on rebuilding your credit score, Watts says. If you're having trouble making your monthly payments, "deal with that situation first," he says. "You can always improve your credit score over time after you take care of current priorities."

READ MORE - Earlier notice on rate hikes gives credit card users options