CREDIT TRAPS FOR THE UNWARY

If you have two different interest rates on one account (e.g., a lower rate for purchases, a higher one for cash advances), the creditor will post the payments toward the lower interest rate balance, not the higher. To avoid this, use two different cards if possible--one for purchases you will pay off when the bill comes (thus incurring no interest charge) and the second, lower-rate card if you have to carry a balance.

You may also incur a wide variety of fees. Creditors may charge you an annual fee to maintain the account. These fees can range from $25 to $50 or more each year. They may also charge fees to transfer balances from other cards. Generally, these processing fees equal 2 to 4 percent of the amount you transfer. Many banks levy a similar surcharge on transactions involving conversions from foreign currencies. If you're late with your monthly payment, you may be charged a late payment fee that can be as much as $39 each month you're overdue. If your account balance rises above your approved credit limit, you will be assessed a monthly overlimit fee until you bring the total balance due under the limit you're allowed.

When these fees add up, you may find that making your minimum monthly payment won't bring your balances down. In fact, your balance will increase if your monthly payment isn't greater than the accumulated interest and fees due, since these unpaid charges become a part of the principal you owe. Moreover, your account may then be considered past due and reported as such to the credit bureaus.

If you surf your debt, beware the wake

You may periodically transfer your balance from one introductory offer to the next. This is known as surfing. Done successfully, surfing lets you avoid the higher interest charges that your debt would incur when the original card offer expires. By the time the interest rate on the original card increases, you've surfed over to a new offer at another low rate.

Although surfing helps keep your interest charges to a minimum, it's not without pitfalls. You may be offered a low rate only on balance transfers; if new purchases and cash advances are billed at a higher interest rate, these charges could offset the savings you would otherwise enjoy. Moreover, as creditors move to counteract the surfing trend, many stipulate that if you transfer balances to another card within a certain time after opening your account, you'll be retroactively charged a higher rate of interest on the amount you transfer. Thus, surfing before this time period is up eliminates the savings.

Finally, if you transfer balances to a new card, close the original account as soon as you've paid it off. Write the creditor a letter (keep a copy for your records) asking it to inform the credit bureaus that the account was closed at your request. This prevents new potential creditors from denying you credit when they see too many open lines of credit, and it also deters anyone else from fraudulently using an inactive account.

Protect yourself against credit fraud and identity theft

Credit fraud (the illegal use of your accounts) and identity theft (opening new credit using information about you) are two of the fastest-growing crimes today. In many cases, you may not know you've been victimized until it's too late. Here are some indicators of these crimes:

• A creditor informs you that it received an application in your name
• You've been approved for or denied credit you didn't apply for
• You no longer get your credit card statements in the mail
• Your credit card statements include purchases or cash advances you never made

To minimize the chances of being victimized, take precautions to safeguard your credit account information. Don't carry credit cards you don't use often. Be sure to sign your cards, and never sign a blank charge slip. When you use the card, try to keep it within your sight. Save your receipts, and obtain and destroy any carbons. Don't allow a sales clerk to write your credit card number on a check "for identification." Finally, never give out your account number over the telephone unless you initiated the call and know the organization to be reputable.

Scharf also emphasizes the importance of truly listening to the particulars of each client's personal situation, and cites education as a crucial factor in his company's effectiveness.

"We educate clients about the entire investment process and not just about our own products and services," he says. When a client approaches Scharf Group for the first time, they are introduced to a team of staff members for a discussion of their needs and how the Group's services can best assist them in reaching their goals. Though this initial consultation is complementary, Scharf is insistent about its value. "We need to see if there is a fit," he explains. "Will the client benefit from us and vice versa? We're looking for a win-win relationship."

Scharf is passionate about what he does, and thrives on conveying that enthusiasm to others. He finds personal motivation and inspiration in helping people achieve their financial goals, and notes "When you love what you do, even working is time for yourself." That kind of enthusiasm pays off, and 99% of Scharf Group's clients come to them by way of referral.

Rena Margulies, vice president of the mortgage division, reiterates Scharf's sentiments. "There's a great camaraderie at Scharf Group," she notes. "It's a very team-oriented atmosphere, and it's a pleasure to be part of that. And when I'm productive and happy, the people who benefit are the clients."

She also refers to another of Scharf Group's points of pride — their devotion to staying current with the latest information, as well as with their clients' evolving needs. "There's tremendous technology behind us here," says Margulies. "Databases, programs — [Scharf] has always been one to invest in those things. I used to do more things the old-fashioned way, but the new technology has made my work even more productive and effective." Scharf Group's unrivaled technological support system includes the revolutionary BetaVest™ CASE Management System, and they have recently overhauled their company website to better educate and support current and prospective clients.

In exchange for their unsurpassed expertise and commitment to service, Scharf asks for the respect and trust of his clients "The media too often misleads people into thinking that anyone can and should handle their own finances, but this is not always the case," he points out. "There are many people who simply don't have the time or resources to do it all themselves. This is where we come in." Client involvement and education are as essential to money management as they are, for example, to healthcare. But just as people don't teach themselves how to be doctors, there is ultimately no substitute for the kind of professional guidance provided by Scharf Group's years of extensive experience and accomplishment.

Jason Brown, vice president of Prudential Financial, an investment management company, has frequent dealings with Scharf Group. He cites the company's "holistic approach," and points out that their enormous range of services simply doesn't exist anywhere else today. "There's no other firm that does all that they do for their clients," he says. "I work with 500 advisors, and Scharf Group is leaps and bounds ahead of the rest."