The board of the UK Payments Council, a body composed of England’s top banks, has voted to phase out paper checks by 2018.  With the rise of electronic bill pay, the old tried and true method of paying by check is becoming, not only obsolete, but also expensive.  According to a Reuter’s report, it costs nearly a British pound (roughly $2) to process a check.

We ought to see this as a sign of things to come for the U.S. as well.  Our banks and economy, similar to Britain’s, are moving towards greater streamlining through electronic payments.  People demand the speed and efficiency of electronic and on-line banking.  The paper check has already become obsolete for many purchases (on-line shopping, for instance), and retailers are increasingly refusing to accept personal checks as a means of payment.  Many retailers see checks as an unnecessary invitation to fraud.  Others see it as an unnecessary complication in payment processing relative to the debit card efficiency and speed.

A recent article in the San Francisco Chronicle offered an interesting opinion by Brent T. White, a law professor at the University of Arizona.  He advises homeowners to allow their home’s to go into foreclosure when they find that their home is worth less than what they owe on their home loan.  His argument is that foreclosure is a smarter economic decision and that it is only the social stigma of losing one’s home that is keeping homeowner’s paying their bills when it would be in their best interest to cut their losses and run.

I agree with White that there are times when it is in a homeowner’s best interest to simply walk away from their loan.  However, I also feel that he grossly misrepresents the repercussions of a foreclosure. White’s suggestion completely downplays that, in most cases, creditors can still legally pursue you.  He also suggests that one’s credit score after going into foreclosure is likely to recover in two years.  The truth, however, is that you will have bad credit for the next 5 to 7 years, which means limited access to credit and increased costs on anything that relies on your credit history (e.g. renting an apartment).  Finally, White’s suggestions ignores the human cost of this stressful process.  Going through foreclosure creates a great deal of anxiety.  It is not something you can simply do without feeling the effect on your own well being.

Our government suffers from a naivete with some of its plans to resuscitate the economy which consumers simply cannot afford.  To be more specific, the current administration needs to come to terms with the fact that business practices are dictated by laws and potential for profit.  Businesses cannot, and should not, be counted on to change their policies out of the goodness of their hearts.

Last March, the Obama administration put into place its Mortgage Relief Plan to help homeowners stay out of foreclosure by urging banks to institute loan modifications for borrowers.  Renegotiation of their loans would allow borrowers to make payments on a more affordable rate, allowing them, in theory, to keep homes that would otherwise go into foreclosure.  Since its launch last March, the plan has provided permanent loan modifications to only 4% of those who have attempted to sign up.  Lenders like Bank of America have helped only .06% of the people who’ve requested a modification.

From time to time, we are sent relevant information from other sources hoping to use Wallet Blog as a way of getting important information out there to American consumers.  We were sent this explanation of Medicare benefits by David Colgren, the media relations counsel to CalCPA and thought it might be of interest to our readers. Here is his explanation:

Step 1. Understand how Medicare works.
Medicare is a federal program that provides health insurance to retired individuals, regardless of their medical condition. Here are some basic facts about Medicare that you should know.

Here’s a new credit card scam for you. Cleverly enough, it convinces its victims to call a voicemail system and input the access data for their credit cards.

Victims in Kent County, MI reported receiving cell-phone texts and recorded calls that said that one of their credit cards had been deactivated. They were directed to please call  (616) 855-1134 to set everything right again.

It’s almost to the point that I don’t want to read the Business section anymore. Are you with me? And cognizant as I am that “if it bleeds, it leads,” it’s time for a feel-good financial-services story. So I emailed Liz Pulliam Weston, nationally syndicated personal-finance writer and author of many books, to “get her thoughts on the best and worst financial products and services of 2009.”

Tell you what: the woman’s smart with a capital MART, but I was surprised by her answer.

We’re coming up on the close of the year, so we thought we ought to take stock of some of the ideas we’ve put forward that we think are central to our commentary on the world of finance. Since starting Wallet Blog, we’ve found that our mission to provide information on the nation’s economy, consumer advocacy and commentary on the financial news of the day has become deeply linked to the recession.  Because of this, we’ve written many articles on what we think our country’s leaders should do in order to fix the economy, as well as what we think about what they’re actually doing.  During that process, we’ve noticed that a number of major factors keep coming up to describe the problems with the state of our economy and our recovery.  We wanted, then, to take a moment to summarize the ten things we see as endemic to the economic problems we are facing and the steps we see as necessary to achieving their solutions.

10.  Level the Playing Field for American Workers:  We shouldn’t be penalizing U.S. companies for hiring from inside the country rather than outsourcing.  The payroll taxes that our government requires employers to pay for their American workers encourages companies to hire from outside of the United States.

Citibank is suspending foreclosures and evictions for the holiday season.  For 30 days, from December 18th through January 17th, Citibank is offering a reprieve to borrowers whose loans are owned by Citibank Corporation.  The company reports that it will help about 4,000 borrowers who are either scheduled to be evicted, or scheduled to receive notice of eviction during this period.

Citibank deserves to be commended for this act.  In the general state of the American economy as it stands right now, lending institutions are placed in a precarious position where they have to implement tough policies to keep their businesses afloat.  It seems that Americans are increasingly turning to lending institutions as a solution to this recession as well as a scapegoat for this nation’s economic troubles.  All too often we hear that either our economic crisis was the result of banks giving out bad loans (which it was), or that economic recovery depends on lenders lowering the minimum requirements for loan qualification (which it does not).

On December 14, 2009, President Obama met with CEOs of the largest banks to urge them to approve more loans, to lower interest rates, and to curb fees.  The meeting was obviously in response to Federal lawmakers’ feeling that, having bailed out the banks, the nation has a right to expect concessions from its financial institutions.  This feeling is fueled by the belief that America’s banks, having received federal funds, have since failed to adequately return to the business of loaning money.

To put this in perspective, we should remember that one of the large contributors to the current recession was the practice of giving out home loans to people whose incomes and credit histories did not justify those loans.  The assumption was, of course, that any loan was essentially a good investment since the value of the house was expected to appreciate astronomically.

Now, here at Wallet Blog we’re no strangers to high-yield, interest-bearing checking accounts. Wrote about Focus Bank back in May and yes, their offer still stands. But how could I be content, knowing that I’ve only alerted you to one 4.51% checking account? Time to rectify that situation with a few other options.

For instance: Bank of the Sierra, based in my beloved California, also offers a 4.51% yield checking account. And you don’t have to be a millionaire to enjoy their top interest rate; you can open the account with only $50, and you’ll earn 4.51% APY on balances up to $25,000, so long as you meet the minimum qualifications for that statement cycle. (Qualifications include a minimum of 12 Sierra Check Card purchases per statement cycle, minimum of one direct deposit/automatic payment monthly, one Sierra BillPay payment per cycle, eStatements, and you must open the account line.) And, if that’s not enough, there are no monthly fees, you can earn up to $25 in ATM refunds each statement cycle, and there is a beautiful picture of Sequoia redwoods on their Sierra Reward Checking Web page. Click here to learn more and to open an account. Please note that the account is available nationwide, but you must be a U.S. resident or a U.S. resident alien to apply.

OK, the economy might be bouncing back but my wallet sure isn’t, so I went trolling on the Internet for some free samples. Call it cheapskate retail therapy. There are plenty of places where you can sign up for free stuff, but at what cost?

The first site I went to was Thunderfap.com.  They list an appealing “fall sample pack” on their home page, along with other items that would be of interest to pretty much anyone who has pets, kids, or a pulse.

In order “to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally,” (according to their own FAQ on the subject) the Federal Reserve Bank has been buying up $1.25 trillion in fixed rate Mortgage-Backed Securities otherwise guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae.  The result has been a drop in the mortgage rate for 30 year mortgages.  The duration of this program is limited, however, and is set to expire by the end of the first quarter, 2010.

At the end of the Fed’s purchase program next Spring, the market will be ripe for a mortgage rate increase and a reduction in purchasing power for consumers looking for low monthly mortgage payments.  Experts are estimating that when the Fed steps out of its current purchasing position, 30 year mortgage rates are likely to rise to 6% despite government incentives for first time home buyers as well as current homeowners.

Here at Wallet Blog, we get lots of PR pitches. It’s flattering, really. But one company I never expected to hear from, especially in November, is Coppertone. Nevertheless, it’s fun to be surprised (especially as I just winter-proofed my double-paned windows against the encroaching Nor’easters).

Their pitch was helpful and informative, and I live to be helpful and informative, so let’s talk about some little-known ways to maximize your FSA spending.

So, my husband and I have been delighted with our choice to buy a CSA farmshare. Our summer has been chock-full of mostly local, mostly organic vegetables, and it’s pushed me to become a more adventurous cook and eater (yes, I ate the beets. Call the press).

But now, there’s a new buy-local buzzword in town. It’s called “cowpooling.” This is where neighbors pool their money to purchase all of the meat from one local cow.