Mint.com unveils online debt reduction contest

Think you have what it takes to be the biggest loser when it comes to reducing your debt? You're in luck.

Mint.com, an Intuit-owned online start-up that offers free financial advice and easy-to-use budget planning tools, recently launched its "Drop Your Debt Challenge" urging debt-cutters to team up with folks in their city to reduce their debt. The idea is for people to work together by sharing savings techniques and offering each other support during the process.

After six months, the city team that trims the most fat from their debt will snag one of four $1,200 cash prizes. There's a $5,000 prize for the most referrals.

"Think about it as 'The Biggest Loser' for debt -- adding competition and teamwork to help people deal with something they need to undertake," says Aaron Patzer, vice president and general manager of Intuit Inc.'s Personal Finance Group and founder of Mint. "Every day, competition motivates people to lose weight, win at sports, or grab a parking spot before the next guy. This is a chance to have a positive impact on your finances."

According to the release, challengers will receive regular updates through Facebook on their city's progress and get money-saving tips from others on their team.

Click here for the details.

Boston's inflation rate trumps other metro areas

Inflation is impacting Americans across the country, but the Boston area has been hit especially hard by rising prices. The Associated Press reports that consumer prices increased over six percent last year, the biggest jump of all metropolitan areas.

Overall, inflation rose about 5.5 percent last year. The country has not experienced that kind of year-to-year jump since 1991. One of the major underlying causes for the increase is the price of fuel.

As the price of crude oil spent weeks setting records, those price increases translated into higher prices for gas, food and other goods.

These effects have been compounded in the Boston area because of the region’s distance from the country’s main production centers of food and fuel. A significant amount of the nation’s oil comes from the South and the Midwest, and the Midwest and California are the major agricultural centers.

The more it costs to transport these items and the further they have to go, the more consumers must pay. In addition, many homes in the Boston area are dependant on oil to heat their homes, so an increase in the price of fuel causes home heating bills to rise as well.

--Bridget O'Sullivan

CONSUMER WOES: Digging deep into the debt hole

Why do Americans continue to dig themselves into a hole?

Back in the day, people set money aside for personal purchases and saved for surprise expenses. Today, the average American household carries $8,565 in credit card debt, a 15% increase from the year 2000.

In total Americans have $2.56 trillion in consumer debt, up 22% since the year 2000 according to the Federal Reserve Board. For some reason, debt is increasing as most American's incomes are not. We have grown into a consuming society that believes it is OK to be in debt, in order to have that new phone, new outfit, or new car.

Disposable income that must be used for debt (credit card payments, car loans, mortgage interest, principle) is up to 14.5% from 11% just 15 years ago.

The New York Times tells the story of Diane McLeod and her debt hole.

McLeod began debt free, but a divorce caused her to spend and rack up $25,000 in credit card debt. She bought a home soon after with a $135,000 mortgage. Five years later illness and irresponsibility caused McLeod to owe $237,000 on her mortgage.

Now in foreclosure, it is hard for her to see light at the end of the tunnel.