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Archive for the ‘Finance’ Category

Introduction.

As the run up to Christmas closes in is there really a way that you can make using a credit card pay for you? Unfortunately Santa Claus, or Father Christmas if you prefer, doesn’t include his own brand of special Christmas credit card - but that’s not to say that you can’t find one to match the type of spending power you’re likely to need.

Holding credit card balances.

It’s a fact that the majority of credit card holders keep a balance of some sort on them. Of course this is not an ideal situation to be in as you are always owing at least some money to the credit card company and, if you at least don’t keep up with the minimum repayments, the interest you get charged can start to mount up leaving you with an absolutely huge bill. What you have to remember is that every time you use your credit card you are in effect taking out a small personal loan; so it’s not just the cost of whatever you buy that needs repaying, but that cost plus interest. It is therefore absolutely essential that you apply for a credit card with the lowest APR (interest rate) that you can find. If you have a good credit report, especially when applying for a new credit card, then use that as a bargaining tool with your credit card company to reduce your APR. Alternatively, if you have a high APR credit card, look for a company willing to give you a lower APR one and transfer your outstanding credit card debt.

If you regularly clear your credit card balance.

For those that can afford it the very best way to use a credit card is to buy things with it - but then always clear the balance as soon as the credit card bill comes through. If you are such a customer you should be able to negotiate a great APR, even though you rarely need to worry about it. Also, as a good credit card customer you can expect to pay no, or at least, reduced annual credit card or transfer fees that some of the credit card companies charge for.

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Introduction.

Being in need of a quick loan in the pre-Christmas rush can make some people just a little bit sloppy, about where they’re getting a personal loan from or what interest rates they’re being charged. Quite frankly, December can be one of the worst times to get caught out when looking for some cash to spend on your Christmas preparations, so we hope you’ll find the following couple of things helpful.

Search, think, take!

Whether you’re looking for an online personal loan, applying for one over the phone or even walking into a local finance office - always do some searching around for the loan offers and then have a think about them before you take one out. For example, we all know how easy it is to search for and find an internet loan; however, you should never just accept the first offer that you come across. Always seek one or two other offers to compare it to - to make sure it really is the best deal. The advantage of searching online for a personal loan is that you can take your time searching around, unlike with a phone application or being in an office with a sales-person constantly trying to tell you how marvelous their offer is.

Ask questions.

Whether you opt for an online loan or get one from somewhere else, always ask questions about the deal you’re being offered. Don’t forget that modern day finance companies are simply the Scrooge of today. It is always worth asking if they can lower the repayment interest rates, remember - if you don’t ask, you’ll never find out! If a loans company thinks they can charge you 20% interest they will, but, and especially if you’ve got a good credit report, they’d probably agree to charge you 15% rather than lose your business. Also, an absolutely vital question to ask is, do they have a ‘cooling off period’. This means if you change your mind about taking out the loan within say a day or two, it can be cancelled without you incurring any penalties.

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Introduction.

With the Christmas season being truly upon us now and all the spending that it entails, it is also the time of year that you need to start financially preparing for 2010 to avoid those New Year money blues. On the basis that the New Year will bring with it all the bills for the money you spent on the Christmas celebrations - should you be worried that you’re probably not going to be saving any money?

Savers are losers!

The immediate response to that question is that you really shouldn’t feel too bad about not being able to save any money in the first part of 2010. The Federal funds rate has been pretty steady since 2008 at 0.25% and it’s showing little, if any, sign of improving in the New Year. The net result of that is that putting your money into a regular savings account with a bank will not yield any interest of any significance at all. However, that low rate could be potentially very attractive to borrowers. By that it is simply the case that, if you have taken out a personal loan to cover the costs of Christmas, it will have a low rate of interest attached to it - making it easier for you to repay. So, why bother thinking you’ll save some of the spare cash you have and re-pay the debt, when you might was well simply use all of the spare cash to pay off the loan more quickly. Paying off the loan ahead of schedule may well help you to reduce the total interest you pay and could significantly help your credit score when you next apply for your free credit report.

Loans you’ve already got.

Another tip when preparing for 2010 is to think carefully about switching any variable rate loans to fixed ones. The longer term your variable rate loan has to run the more reason you have to switch it. If you can’t repay the current loan and the finance company won’t let you switch it to a fixed rate loan - talk to a financial advisor about taking out a new loan on a fixed rate to repay it instead.

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Introduction.

There seems to be a new craze spreading through all sorts of companies that most of us ‘regular’ folk have financial dealings with - that of charging us for being good customers! If you’re the sort of person that always pays their bills in full, always repays your credit card balance in time, doesn’t have a personal loan from the bank etc; or in other words never owes money to anyone else, then be warned you could be in line for good finance penalties - just so the finance companies can get some money out of you.

They might as well ‘mug’ you.

In what amounts to little more than daylight robbery or being mugged, finance houses, banks and credit card companies are starting to impose ‘low use’ and ‘inactivity’ fees to accounts that are either not used or are very rarely used. Why? Well the answer is surely too simple - simply to boost their profit margins in the recession. The answer to this is, of course, also very simple. If someone tries to penalize you for not using an account, simply apply for a new credit card or loan account elsewhere. Some of the ‘dormancy’ charges being quoted at present are $50 on AMEX card accounts if you don’t use their Platinum cash-back credit card within a period of 12 months. Being charged non-usage fees by telecoms companies if you don’t make a certain amount of calls a month, not to mention stock-brokers slipping in exorbitant fees - even if you don’t ask them to do anything for long periods of time. However, the worst part of all this is that the companies concerned won’t send you a bill for these hidden charges - but will just add a few dollars to a bill here and there; so if you don’t scrutinize your bills for such covert charges you’ll never know you’re paying them!

Avoiding financial penalties for being a good customer.

Always read the small pint of any financial or loan agreements you enter into. Also, always read the small print on your credit card bills and other financial statements. If you only get your bills/statements online - always check them. Forgetting a user id or password is a poor excuse for not checking you’re not getting ripped off! Always read any letters or emails about changes to your account, if you don’t challenge any sudden changes you are in effect compliantly agreeing to them. Finally always remember, if your free credit report says you’re not in debt to them - you have no debt of loyalty to them either.

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Introduction.

Life and debt is becoming every bit as much of a reality for most folk as the inevitability of life and death. No matter whether you’re on one of the lower wages, comfortably off on a middle income or consider yourself to be doing quite well, this recession has hit everyone in one way or another. No matter whether that’s worrying over whether you can pay this months rent or worrying that your pension fund seems to be evaporating before your eyes.

Take control of your debt.

The single most important thing for anyone to do if they’re in debt is to budget. Surprisingly, the more income people have the less inclined they are to budget. Unlike people on a restricted income, they think money isn’t in short supply so why do they need to budget? Their problems can then quickly start to multiply when they suddenly need to access spare cash, having been used to spending it all - there’s none available. A simple budget plan can save you hundreds of dollars a month. Just budgeting to only spend a set amount on food or socializing will not only save you money - but might just get you thinking how wasteful you’ve been in the past. Along with your budget keep a spending diary recording all your expenditure, you can then use that information to refine your monthly budget even further.

Still in debt?

If you still find yourself in debt then you should think about seeking expert advice. You can do some things for yourself like getting your free credit report, so you can check up on exactly how much debt you have. The more debts you have on personal loans, mortgages or credit cards the more money you have to pay out in interest. So you could see what online financial advice you can gain about how to reduce the amount of interest you’re paying, so that you can then concentrate on paying off the capital and clear the debts.

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Introduction.

With the whole country seemingly fixated by what may or may not happen regarding health insurance, a financial problem of potentially equal enormity seems to have been pushed to the back-burner, that of pension planning for retirement. It is currently estimated that only one third of the population are adequately planning for their pension, which in effect means that only one third of us are paying sufficient funds into our pension pots.

The cost of putting off pension planning.

The main problem with pension planning is planning for the effects of inflation, or indeed further market crashes, in years to come. What might seem adequate and a good deal now - in 20 years time might not be so good. A simple example here would be suppose you retire now at 65 on a $20,000 a year pension. You can quite realistically expect to live for another 20 years or more, but in 20 years with inflation at just 3% a year, you’ll need nearer to $40,000 to maintain your lifestyle. Add to this the fact that you may well need extra medical insurance as you get older to deal with the ailments that age can bring - and what seems like a good pension can soon look like not so good a deal. If that sounds like the situation you might be in - do discuss your pension requirements and planning with one of the reputable and professional independent financial advisors you can find on the internet, by searching for something as simple as ‘pensions advice‘.

401(k) investing.

Even if money is tight right now, avoiding providing adequately for your old age really is a false economy. So, if you’re working for a company operating the 401(k) pension scheme, start up a pension plan now. No matter how small the amount you invest in it now, it will pay dividends for you in the long run, especially if you can add catch-up contributions when you get nearer to retirement age and any financial commitments to your immediate family probably decrease. Following last years recession stocks have risen about 50% in the last eight months, so if you’re waiting for the markets to recover before starting a pension plan - you’ve already lost out on several months saving, so delay no longer and review or start your pension plan now!

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Introduction.

The great thing about finding financial advisors on the internet is that it really is just so simple. However, how do you know which is the best one to pick out of all the online financial advisors you have to choose from? Needless to say you need to make a wise and careful choice on this one to either safeguard your hard earned savings and investments or to get the right advice about personal loans, mortgages or clearing debts.

Types of Financial Advisors.

An individual financial advisor advertising their services should at least be able to prove to you that they are qualified to work as at least one of the following: A Certified Financial Planner (CFP) will not only have passed the appropriate examinations but will also have at least three years experience as a personal financial planner. A Certified Financial Consultant (CFC) is very similar to a CFP, but he or she is more likely to be involved with selling insurances as a financial product. If you need advice concerning your taxes then a Certified Public Accountant (CPA) would be recommended; whereas for help with investments a Chartered Financial Analyst (CFA) will sort out your securities for you. Whilst you might find a website offering financial advisor services ‘free of charge’ the reality is that you will be paying them either some hidden form of commission or a higher flat rate/hourly fee.

Questions to ask.

So, don’t be afraid to ask them outright if they charge a flat rate or hourly fee or if they are paid according to commissions on their work for you. Some advisors might well expect payment according to ‘fee based compensation’; this is just a fancy term for charging flat rate/hourly fees and commission. You might also want to ask them who else they currently represent and look for references/testimonials from exiting clients, to check that they are bona fide. Another thing you can do to protect yourself from any likely financial charlatans is by asking to see their financial advisors ADV form. This is a form that all registered investment advisors must lodge with the SEC or their State authority. Finally, do ask them “if they accept financial fiduciary”; which simply means that they will always act solely in your best interests.

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Introduction.

If you’ve ever felt that you’re being ripped off over credit card payments - you’re probably correct! Many credit card users are unfairly being made to pay over the odds on their credit cards because the card companies insist that any repayments you make go to pay off low interest rate debts first, leaving the higher interest rate debts to carry on accruing more and more interest - meaning that you have to keep paying more and more to the credit card payments.

A typical credit card scam.

Everyone loves a deal and being offered 0% interest on credit card balance transfers is always a tempting one. These can be great deals - providing you don’t start to spend further money on the credit card, in which case it actually becomes somewhat of a credit card scam, perpetrated by the credit card companies! Consider this simple example; you transfer a $3000 balance to a new credit card at 0% interest, knowing you can repay that within say 6 or 12 months. But, then spend a further $2000 on it at an annual 20% interest. Every time you make a repayment you’ll only be reducing the original $3000 debt, meanwhile the new debt is rising $400 the first year, $480 the second and so on.

The government to the rescue.

 The procedure above and employed by the credit card companies is known as adverse order of payment or negative order of payment. The good news for anyone with a credit card debt problem like this - is that next year legislation will come into force in the US making credit card companies change from negative OP to positive OP; ensuring that high interest rate debts get paid off before lower ones. However, if you can’t wait until then there is another way around this credit card scam. If you do use a 0% interest rate balance transfer, do not use that credit card for other purchases; look for another low interest rate credit card for your all of your other purchases.

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Introduction.

This article is intended for both those people who are looking for someone to provide them with financial aid; as well as anyone fortunate enough to have spare funds and capable of providing financial aid to others. If you’re not already aware you don’t actually have to be a bank or licensed finance company to lend money from or apply to borrow money from.

Social lending.

Run an internet search for the term ’social lending’ and you’ll see listed several what are collectively known as social lending clubs through which you can lend or borrow money according to your means. The social lending club itself is registered with the financial authorities and completely above board; of course when selecting a social lending club do satisfy yourself that it is a 100% bona fide one. Unlike a conventional bank or finance house these websites are made up of individuals, and small groups of individuals, who are prepared to invest their money as loans to other people. These financial aid websites work the same way as any other social media website by connecting together people; those with money to lend and those seeking to borrow money.

Online loans.

Whether you’re the lender or the borrower providing or getting an online loan via social lending is simple. Everyone registers with the social lending club website and agrees to have a credit score check. The reasons for this are simple; the social lending club website needs to be sure that lenders have the funds and that borrowers are not habitual loan defaulters. After that the borrowers post how much they want to borrow and why, then the lenders make an offer according to how much they can lend and the rates available. Interets rates and repayment periods can vary according to how much is required and and the borowers credit history. Don’t worry too much if as a borrower you have a poor credit score, there’ll probably still be lenders willing to work with you on a social lending website.

International social lending.

In the news again this week is how the G20 nations are yet again dragging their feet on funding the billions of dollars promised to developing nations. If you have money to invest as loans there’s no reason at all why you can’t use at least some of it to finance overseas loans. The rates of interest and repayment periods are exactly the same as those for USA loans. However, on a dollar-for-dollar basis making an international loan to help get a business venture off the ground in Africa or Asia could be both immensely rewarding and yet be virtually a philanthropic gesture from you.

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Introduction.

With it all being so easy to do we’re all into online banking, applying for loans online and even arranging our mortgages online as well. Like everything in life conducting financial transactions online does carry a risk, a risk from money fraudsters that can be needlessly increased and complicated if you don’t take some basic precautions. By money fraudsters we’re not talking about someone hacking into your online money accounts, but simply tricking you into giving away details that will allow them to access your money with ease. You need to be constantly on your guard against these modern money scams as, in today’s fast moving society, it would be really easy to get tripped up by some of them at a time when you’re really busy or pressed for time.

Phising, Smishing and Vishing.

Unless you are a complete newcomer to online finance or have been living on Mars recently - you’ll already have an idea what Phishing is. Phishing is when someone sends you an email, probably pretending to be from your bank or an online finance company, asking you to confirm your access usernames and passwords under some spurious reason. A new version of this is breaking through where the perpetrators have the gall to actually contact you by phone asking you for those same details; ie voice phishing or vishing! If you’re a victim of smishing - then they simply ask for the same details via an SMS on your cell phone. Finally, don’t leave finance details lying around. Shred old statements with your bank/credit card details and if you move home make sure mail gets forwarded to you.

Job and auto frauds.

A report this week has highlighted the state of the US jobs market with more jobs being lost and unemployment at 9.5%. So, whether at home or abroad if a company asks you to send them money ahead of a job interview or offer, or even a job itself - don’t, it is almost certainly a scam. You may well feel you really need to get the pay checks rolling in again rather than taking out a loan, but how would you feel if you’d been scammed out of your much needed savings? Similarly another current scam going around is someone selling an auto and asking you to escrow money to them in advance of seeing or buying it. Again, don’t do it, as you’ll never see the car or your money again, which could be an absolute disaster if you’d taken out an auto loan for it!

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