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Don't Let a Bad Gift Ruin a Good Friendship

By Michelle Singletary
Thursday, January 6, 2005; Page E03

When I can, I'm happy to answer some of the many questions I get in my mailbox. So here are some recent reader queries and my responses:

On Christmas Eve, I was invited to my best friend's home, where we exchanged gifts. I spent the week before Christmas searching for the perfect gift for her. I finally found a beautiful blouse that I knew was just her style. She wore it that evening. Her gift to me was a can of Maxwell House coffee whose "use by" date had expired in August. I am so hurt by this and I don't know if I should tell her how I feel. It makes me wonder how important our friendship is to her.

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How sad that the exchange of gifts can often cause such grief. But yes, you should tell your friend how you feel. If this person is such a good friend, then I think it's okay to say (or, better, joke), "What was up with that expired coffee you gave me for Christmas? I love coffee, but I would rather have some that is still good to the last drop."

The important thing here is to deliver your lines in a lighthearted way because, friend or no friend, no one owes you a gift -- even a bad one. Maybe there is a good reason your friend gave you an expired can of coffee. Perhaps she didn't know it had expired. Maybe she wasn't expecting to exchange gifts so she just looked around for something -- anything -- to give you. Or maybe she was just being thoughtless. In that last case, it's understandable if you considered ripping that new blouse right off her back.

But you suppressed your anger at the time. Good for you. Whatever her reason for the bad gift, you should base your friendship on stuff that matters. Has your friend been there for the important events in your life? Has she talked to you until the wee hours of the morning after a bad breakup? Don't throw a good friendship away because of a bad gift.

I have student loans of $13,000 that I already consolidated at an interest rate of 8.25 percent, so I can't take advantage of the new, lower-rate loans. Would it be wise to move this debt to a credit card where I can get 2.99 percent or 3.99 percent? I would have to ask that my credit limit be raised to accomplish this. Would this negatively affect my credit rating?

It may seem logical to move debt carrying a higher interest rate to something with a lower rate. But in this case, the transfer is not a smart move. Sure, the credit card company is offering a low rate -- for now. Just because you have a credit card with a fixed rate doesn't mean the rate will stay that way. Those low rates often come with loopholes. Credit card companies retain the right to raise your rate for any number of reasons. For example, pay late, even once, and on any of your cards, and that low rate could jump to double digits.

And if you max out your new credit limit to accommodate the student loan debt, it could lower your credit score. Generally, you should use only about 50 percent of your available credit on any card.

My son, a senior in high school, is interested in joining an investment club. Can you offer any suggestions?

I think it's wonderful that your son is interested in investing. To find out more about investment clubs, contact the National Association of Investors Corp., a nonprofit organization of investment clubs and individual investors. The group's Web site is www.better-investing.org. NAIC can't help your son find a club, but many NAIC chapters post a list of clubs looking for members and of members looking for clubs.

I am a 26-year-old engaged homeowner with an excellent credit score, but we have a combined $18,000 of credit card debt. We are trying to plan a conservative wedding ($10,000). We want to be free of credit card debt by the time we are married in May. Do you think a home equity loan is the best way to go?

Lots of people use the equity in their home to pay off credit card debt. Personally, I think it's a dangerous financial move. You take unsecured debt (credit cards) and replace it with secured debt (a loan backed with your home). Unless both of you have changed your spending habits and you're sure you won't get into credit card trouble again, don't put your house in jeopardy. And even if you get the home equity loan, you won't be out of debt by the time you plan to be married. You will have just transferred the credit card debt someplace else, albeit at a lower interest rate.

Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online at www.npr.org. Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or send e-mail to singletarym@washpost.com. Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please also note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.


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