Archive for July, 2010

Do You Know About Money?

July 12, 2010 at 8:16 am

In a test of basic economic principles given to 2000 Americans, both adults and teenagers, the average grade was failing. Throughout the years, it has been proven by numerous studies that when high schoolers graduate, they leave with little understanding of personal finances.

I was never taught how to count back change, balance a checking account or understand compounding interest. But yet, I graduated with the highest math honors, having tackled calculus and physics courses at the neighboring college. But at no point, was I taught the basics of finances before I entered college. Nor were many other American teenagers.

And now credit card debt and financial troubles seem to be everywhere. It is surprising how many people don’t really understand their finances. For example, one of my close friends recently told me that her credit cards had great rates once the 0% interest expires. I told her that her rates can go up at any time, but she didn’t believe me.

So what do you and your children need to know about money?

You need to understand the basics of how to balance your checking and how to budget your income. These two practices will keep you financially grounded. If you can balance your account and stay within your budget, you are probably doing well.

What can throw you off track is debt. And it is coming at you from all sides. You need to understand that there is good debt and bad debt, but that debt becomes fatal if you can’t afford what you have racked up. For example, having a home mortgage is good debt. But if you can’t afford the mortgage payment and risk defaulting on the loan, there is no good in it.

You have to know how debt works. Understand the advantages and disadvantages to using your credit. If you have or are thinking about taking out a credit card, I suggest that you learn all of the tricks of the trade. I would say that the one thing to remember is that debt costs you. All debt costs you. Credit cards, auto loans, mortgages and student loans aren’t designed for your good. They are there to make the lenders money. Keep that in mind.

When you are thinking about taking out a loan, you should do main things:

Know your credit score and what your credit report says. Figure out the total cost of the loan. This includes all of the interest you will have to pay back. The number might surprise you. See how long it would take you to save for it versus paying off the loan. Shop around for the best interest rates and terms.

One of the most important things is understanding compounding interest. This can be slightly hard to get a grip on at first, so have someone show you how the numbers work. And keep in mind that though interest can cost you in debt, it can give to you in savings.

Finally, you need to understand that as an adult, there is more to finances than just money. It is about self-control, trust and other emotions. There are also many facets to managing your finances. You have insurance policies, investments and wills and trusts to consider. It’s all about making the best future for you and your family. That’s what money spent wisely can do for you. Take the few hours to learn how to get there. It will pay you back thousands and thousands of times.

Men, Women and Their Finances

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July 9, 2010 at 7:37 am

What do you worry about most when it comes to your finances and debt or your credit card repayments? It seems that men and women have different outlooks and think differently about their finances. A survey was carried out to see whether men and women thought differently or the same about their finances.

Women tend to look at their current levels of debt while men tend to look to the future and are more likely to plan ahead when it comes to their finances. Women worry more about how they are going to pay off all their current credit card bills, store cards and loans along with their mortgage, shopping and living expenses with three quarters of women doing so, meanwhile less than 50% of men worry about the same thing. Only 13% of men know what their current debt levels are.

While men are laid back about their current debt levels they are better prepared for the future. Men are better at investing their money with half of all men investing in an ISA while only 35% of women are doing the same. Only five out of ten of women have a savings account with men in the lead with six out of every ten. Three quarters of men are paying into a pension for when they retire while only half of women are preparing for their retirement.

The only things that were found to be very little difference in when it came to our finances was the fact that both men and women have little knowledge of credit reports and how they work, although we think we do. Three quarters of men and women said they new what affected credit scores and how companies make their decision but nearly all got at least one question wrong when asked about credit reports. Only 5% of men and women have inspected their credit report in the last year.

1 in 4 of people asked did not realize that late payments affected your score; just over 40% of people did not know that if you have asked for credit regularly then this can also affect your credit score. Three quarters of people wrongly thought that if you had unpaid household bills that this would affect a decision made by lenders. Unbelievably, 60% of men and 67% of women thought that credit reference agencies make the decisions about credit applications, whereas it is the credit card companies, banks and other lenders that make the decision.

Knowing your credit score and understanding how credit scoring works is the only way to fully know where you stand financially and help you make better decisions about how and when you apply for credit.

Earn While You Shop: Find the Right Reward Program for

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July 7, 2010 at 9:00 pm

Earn While You Shop: Find the Right Reward Program for You

Point-based reward programs are proliferating. You can earn enough miles to fly to Paris just by using your credit card or you can accumulate points that can be spent like cash merely by shopping at your favorite stores. But with so many options available, how do you know you’re getting the biggest bang for your buck?

The following tips will help ensure that you pick the right program for your needs.

* Know your lifestyle. Choose a reward program that fits your priorities and lifestyle. If you travel a lot, try air mile travel reward programs like www.milesource.com.

Similarly, if you like outdoor activities, look for a credit card like the Cabela’s Club Visa, found at www.cabelas.com. You can earn points, in the store and online, that can be redeemed for all types of hunting, fishing and camping gear.

* Reap your rewards. Select a reward program that doesn’t add an expiration date to your hard-earned points. If it does, make sure you know the date and use the points before you lose them.

* Look for flexible rewards. Avoid choosing reward programs that tie you into redeeming points only at specific vendors. Look for more flexible options like FreeStyle Rewards, found online at www.freestylerewards.com. It lets you build points by shopping online at more than 175 participating merchants. You redeem your points for a debit card that can be used anywhere MasterCard is accepted, online or offline.

* Click ‘n’ save. Select online shopping reward programs that provide gateway access to your most frequently visited stores. You’ll find everything you need, save money while you shop and build points as you go.

* Share the wealth. How would you like to make point donations to family, friends or charities? Select a reward program that allows you to do so.

* Compare. Just like you would compare merchandise prices, compare point-based reward programs by considering what’s important to you and determining which ones will fit your needs.

Best ISA | Tags: Banking Software, Banks Online, Bill Payments, Convenience, Financial Institution, Opportunity, Options, Pay Bills, Postage Stamp, Saving Time, Time And Money

Do You Bank Online?

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July 5, 2010 at 8:42 am

If you havent made it to the world of options offered in bank-online fields, the fact is that you should be. Yes, there are many opportunities for you to walk into a teller and get your information taken care of. But when do you pay bills? Do you do it in the middle of the night, usually the night before it is due? If this is the case, you may want to consider the options of bank-online to simply give you the opportunity to make those payments on time. Why should you bank-online?

There are many reasons but most of them have to do with the ease of use. You can find yourself saving time and money by getting your work done on the web. You can bank whenever you like. You can check your balance well before the bank opens. You can actually see it as well, not just hear the information but see who is taking money from your account. It is quite simple to use and that too adds to the ease and convenience of bank-online options.

What is also great about it is that it can help you to set up bill payments on the web as well. This means that you go into your account, tell it the day you need to pay the bill, the amount and who to send it to and it takes care of the rest. If nothing else, it saves you the postage stamp! Likewise, you will find that it also provides you with a way to automatically handle those bills so that you are not late anymore. And, it can help you to track your spending and savings because most of the banks that off bank-online options do so by providing you with a way to connect to your banking software as well. This means organization! See what opportunities you have in bank-online through your financial institution.

Debit & ATM Cards

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July 3, 2010 at 10:50 am

The following article covers the liabilities of fraudulent activities for credit cards, ATM cards and debit cards.

Many people find it easy and convenient to use credit cards and ATM or debit cards. The Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA) offer procedures for you to use if your cards are lost or stolen.

Limiting Your Financial Loss

It is faster and easier to process financial transactions today than ever before. Thanks to the electronic age, check cards, debit cards, and ATM cards give us instant access to funds on deposit at the local bank or a financial institution miles away. This also provides an avenue of opportunity for thieves and scam artists to rapidly deplete our financial reserves as well.

There are laws in place that provide a measure of protection from total financial ruination, but you need to be aware of your rights and responsibilities should your cards be stolen or appropriated for mischief. The Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA) are two laws implemented on a federal level that can assist individuals targeted by the criminal element. For the laws to work properly, however, you need to invoke the protective measures by doing certain things if your cards are lost or stolen such as reporting the loss or theft promptly to the issuers.

Limit Your Financial Loss

As soon as you discover the loss or possible theft of your credit cards and your ATM or debit cards you must immediately notify the companies that issued the cards so they will have that fact on record and can monitor the cards for unusual activities. You can usually find toll-free numbers for the 24 hour help line on the back of the card or on your billing statement. It is a good idea to make a list of your cards, along with the account identification and the toll-free numbers, for reporting their loss. When you travel be sure to keep this information separate from the cards so you will have access to the information should you have a need to make a report while away from home.

Keep a record of the companies you notified. Follow up the phone call with a letter that includes all of the pertinent information such as account number, when you noticed your card was missing, and the date you first reported the loss.

As a side note, you might want to check your homeowners insurance policy to see if it covers the liability amount you are responsible for in the case of theft. If you do not currently have such coverage, you might want to contact your insurer to include this protection in your policy.

Under the Credit Card Loss or Fraudulent Charges (FCBA) act, the maximum liability for illegal use of your credit card is $50 per card. If you report the loss before any unauthorized charges are posted you cannot be held liable for any of the charges. If the charges are made using your account number, but not the card itself, you will not be held responsible for any of the charges. The FCBA specifically says the card issuer cannot hold you responsible for any unauthorized charges and limits your loss to $50 of the charges made on the cards prior to you reporting them lost or stolen.

You should always review your card billing statements for errors, but following the loss or theft of the cards you should be even more diligent. If you notice anything amiss in the statement, send a letter to the card issuer along with a description of the questionable charge. Remind them of the phone call you made and the letter you previously sent notifying them of the loss or theft of the cards. There is usually a separate address on the statement to which you will direct billing errors. Do not send the letter along with your payment unless you are directed to do so by the card company.

The Electronic Fraudulent Transfer Act (EFTA) also protects you from fraudulent use of your bankcards. Federal protection from loss due to unauthorized use of your ATM or debit card depends on how quickly you report the loss. For example, if you report the loss before the card is used, the EFTA protects you from any loss. If the report is made within two business days after noticing the loss you will not be responsible for more than $50 on each card.

If you fail to make a report within two business days after you discover the loss, you could be held responsible for up to $500. If you wait more than 60 days after you receive a billing statement reflecting fraudulent activity to make a report, you risk unlimited loss. For example, if you do not file a timely report on the theft of the cards, you could lose not only all of the money in the account, but also be held liable for the amount of overdraft protection you are granted. You must report unauthorized use, loss, or theft of the cards within 60 days of the mailing of your card statement or face unlimited loss. You are liable for charges made between the date of loss and the date the loss was reported. If the thief only uses your account number and not the card itself, however, you will not be held accountable for those charges.

Protecting Your Cards

To protect yourself against fraudulent use of your cards, you should know where they are at all times and keep them safe and secure. If your card requires a password or personal identification number (PIN), dont write the number down so the thieves will get the code along with your cards. Do not use your address, birth date, phone or Social Security number as the PIN. Commit the pass code to memory and dont share the information with anyone.

In addition, the following suggestions may help you protect your credit card and ATM or debit card accounts.

For Credit and ATM or Debit Cards:

* Do not reveal your account number over the phone unless you know you’re dealing with a reputable company.
* Never put your account number on the outside of an envelope or on a postcard.
* Draw a line through blank spaces on charge or debit slips above the total so the amount cannot be changed.
* Don’t sign a blank charge or debit slip.
* Tear up carbons and save your receipts to check against your monthly statements.
* Cut up old cards – cutting through the account number – before disposing of them.
* Open monthly statements promptly and compare them with your receipts. Report mistakes or discrepancies as soon as possible to the special address listed on your statement for inquiries. (For more information on the federal laws regarding FCBA and EFTA, click here)
* Keep a record – in a safe place separate from your cards – of your account numbers, expiration dates, and the telephone numbers of each card issuer so you can report a loss quickly.
* Carry with you only those cards that you anticipate you’ll need.

For ATM or debit cards:

* Don’t carry your PIN in your wallet or purse or write it on your ATM or debit card.
* Never write your PIN on the outside of a deposit slip, an envelope, or other papers that could be easily lost or seen.
* Carefully check ATM or debit card transactions before you enter the PIN or before you sign the receipt; the funds for this item will be fairly quickly transferred out of your checking or other deposit account.
* Periodically check your account activity. This is particularly important if you bank online. Compare the current balance and recent withdrawals or transfers to those you’ve recorded, including your current ATM and debit card withdrawals and purchases and your recent checks. If you notice transactions you didn’t make, or if your balance has dropped suddenly without activity by you, immediately report the problem to your card issuer. Someone may have co-opted your account information to commit fraud.

Paying For A Registration Service

There are service providers who, for an annual fee, will contact all of your credit card and ATM bank card issuers in the case of theft or loss of your cards. This service will notify the issuers and request new cards for you, but other than allowing you to make one phone call and saving you from making numerous phone calls yourself, you do not need this service.

The FCBA and the EFTA allows you to contact your card issuers customer service department directly to notify them of the theft, loss or unauthorized use of your cards. If however, you would enjoy the convenience of a notification service to make the calls for you, be sure to compare the companies offer versus the fees they charge. Be sure your card issuer will work with such a service and find out if the service pays any fees if they fail to notify the card company in a timely manner and you incur charges on your card.

If you decide to purchase service from a registration company, compare offers. Carefully read the contract to determine the company’s obligations and your liability. For example, will the company reimburse you if it fails to notify card issuers promptly once you’ve called in the loss to the service? If not, you could be liable for unauthorized charges or transfers.

Lower the down payment on your mortgage

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July 2, 2010 at 5:03 am

There are many loan options available for potential homeowners who don’t have much cash saved for an initial down payment. One of the most common and respected of these products is a loan insured by the Federal Housing Administration(FHA). FHA loans are designed to help families with lower incomes and not much savings. Additionally, FHA backed mortgages allow lending institutions to extend more lenient terms to make approval for financing more likely. If your credit score isn’t that great, or if you have a bit of credit card debt, you can probably benefit from an FHA loan. Moreover, these loans incorporate grants, and other vehicles into their funding process, to help pay fees and closing costs. By issuing an FHA loan, a bank can allow you to only put three percent of the purchase price down, which can be a huge help. These arrangements can be done with a fixed or variable rate, to accommodate all types of buyers.

If you are in the armed forces, you may want to consider applying for a loan guaranteed by the Department of Veteran’s affairs. VA mortgages can help many veterans and military personnel currently protecting the United States of America. VA financing allows more lenient credit and debt standards and smaller down payments. There is also the possibility of securing a VA agreement that provides the buyer the opportunity not to make a down payment.

If you want to get into a home fast, and don’t qualify for the two aforementioned financing options, there are other financial products that will allow you to get into the home of your dreams without a cash down payment. One of the most common of these methods is to actually fund 100% of your mortgage with two loans. One loan will be taken out for a large percentage of the purchase price of the house, say 75%, and another financing instrument will be taken out for the remaining 25%. Funding of this type allows you to avoid paying certain obligatory insurance that is usually associated with buying a house. So, you could make the loan process cheaper if you go with this method, and then start paying off your mortgage with any cash saved from your salary.

Reducing the amount of cash required for a down payment can also be accomplished by utilizing banks that offer very low down payment percentages. Banks may allow you to only pay a 4 or 5% down payment. This low cash outlay can help you get into homes that you wouldn’t be able to with ordinary terms. These options work well if your income is low or if you don’t want to part with a lot of money up front. Putting less money down can also allow you to assume a larger loan, because you are required to pay a smaller percentage of the purchase price. Banks also have products that benefit public sector employees. The most common professions that may receive more favorable terms are teachers, police officers, and fire fighters. Families should research every possible way to make a mortgage more affordable. Whatever your situation may be, there are many flexible lending options available in today’s market that can get you into a great house without parting with too much cash.

Tips For Getting Finance After Bankruptcy

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July 1, 2010 at 2:54 am

Unless you are willing to pay terribly high interest rates, you should try to raise your credit score as much as possible. The lower your credit score, the higher the risk for the lender to grant you a loan and the higher the risk, the higher the rate. This is unavoidable, of course there are special situations that may have caused your financial breakdown, but there are no means to avoid this and lenders cant take subjective facts into consideration when it comes to fixing the interest rate.

Repairing your credit
Repairing your credit may take some time, but here is the way to start. Open a savings account and start making regular deposits. You dont need to deposit large amounts, but the fact that you have an income that lets you put away an amount of money regularly will soon be recorded to your credit history and will highly contribute to raising your credit score and improving your credit history. This is just the first step but as a first step, the most important one.

Credit Cards
Once youve a reasonable amount of money in your savings account, use it to apply for a secured credit card. Secured Credit Cards are just like regular credit cards only that you can only borrow the money that youve previously transferred to an account. There is no risk for the card issuer so youll be able to get it even if your bankruptcy is close in time and your credit is not that good.
After using your secured credit card for a while you can apply (if you havent been offered one yet by that time) for an unsecured credit card. Your credit score improvement will most surely let you get approved without hassles. Make sure you use the card wisely, make small purchases pay the credit card balance always in full if possible, and never miss a payment nor make late payments.

Using your credit card wisely will help you skyrocket your credit score. Now is the time to start requesting small personal loans. Asking for small loan amounts will guarantee that youll get approved. Your regular monthly payments will do the rest, your credit score will soon reach a status where youll be able to request personal loans at very reasonable interest rates.

Final Steps
At this time you should have reached a good credit tag and youll be able to obtain any financial product that you need. Refinancing your home loan would be the next wise step to continue improving your credit score. Or you could request a home equity loan. Either of them will prove to future lenders that you are able to commit to repaying higher amount loans and that youve finally put behind your bankruptcy.

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