Seasonal Bank Card Bill: $120 Billion

Every minute of every shopping day between now and Christmas, $2.8 million in purchases will be charged on bank cards.

RAM Research Group, which monitors the industry, says consumers will pile up $120 billion in charges over that period, 75 percent of them on Visa and MasterCard.

Charges will average about $600 per person.

The frenzy will be the culmination of a year in which consumers have charged 24 percent more than they did in 1994. Total bank card charges for the year will exceed $700 billion.

Ram offers a list of shopping tips to cardholders that can be obtained by sending a stamped, self-addressed envelop to: CardTrak’s Holiday Tips; P.O. Box 1700; Frederick, MD.; 21702, or by accessing the World Wide Web site at http://www.cardtrak.com.

Surviving Holidays guidance

Also for those for whom the season can stimulate binge charging, Consumer Credit Counseling of Spokane offers “Surviving the Holidays” this Wednesday.

The free, one-hour workshop will include tips on handling holiday stress, organizing shopping, and limiting unplanned purchases.

The class starts at 7 p.m. in the service’s offices at 1912 N. Division.

For information, call 327-3777 and ask for the Education Department.

Magellan gains disclosed

Fidelity Investments estimates that holders of the Magellan Fund, the world’s biggest mutual fund, will receive $4.80 a share in capital gains and income distribution Dec. 18.

Investors whose holdings of the Magellan Fund aren’t sheltered from federal taxes, as in a 401(k) account, will be responsible for paying a 28 percent tax on the capital gains portion of the distribution even if the distribution is reinvested in the fund. The income portion is subject to ordinary income tax rates, which vary according to income and can be as high 39.6 percent.

Fidelity didn’t specify how much of the distribution is subject to the capital gains tax rate and how much to the ordinary income tax rate.

The Magellan Fund distribution estimate equals about 5.4 percent of the fund’s current net asset value.

This year, analysts expect mutual fund investors to get hit with higher-than-normal capital gains taxes given how much the U.S. financial markets have rallied.

Many of the funds that are paying the biggest distributions are funds specializing in technology stock investments, which have rallied strongly this year.

Light ahead for utility funds

Utility funds, dogs a year ago, have generated a solid 20 percent return in 1995, and the manager of one of the best-performing funds foresees more in the years ahead.

W.H. Reaves & Co. manages Strong American Utilities Fund, which had climbed 26.9 percent by the end of October. The company expects electric utilities to return 12 percent to 15 percent to investors next year, natural gas 12 percent and telephones 25 percent.

John Lennon, manager of the Colonial Utilities A Shares fund, said deregulation and mergers should create economies of scale, with a dramatic effect on earnings.

Franchise brochures offered

Interested in investing in a franchise and running your own business?

The Federal Trade Commission has two brochures that explain the government’s franchise rule in detail and offer advice to prospective buyers.

They are “Franchises and Business Opportunities” and “A Consumer Guide to Buying a Franchise.”

For your free copies, write: FTC Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue N.W., Washington, D.C. 20580.

Try this bond pop quiz

If you own Series EE savings bonds, here’s a pop quiz to try. True or false:

The older the bond, the higher its yield.

Yields on bonds issued with a “guaranteed rate” will yield at least that rate.

It doesn’t matter when you redeem a bond.

The answer to each question is false, illustrating that although you might be tempted to stuff your bonds into a shoe box, failing to monitor and redeem them strategically can cost you.

The Treasury Department has changed its method for calculating interest over the years, so it’s possible you hold bonds from different eras. In May, the Treasury began selling bonds featuring two market-based rates, one for bonds held less than five years, the second for bonds held longer.

Those rates, which apply for six months, are updated twice annually. On Nov. 1, the short-term rate dropped to 4.75 percent, while the long-term rate dropped to 5.16 percent.

, DataTimes