April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 10 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Think your credit card transaction will be declined if you go over your limit? Think again. If you do go over your limit you have regret having done so. It could raise credit card interest rate sky high.
Many people learn the hard way when they go over their credit card limit and their interest rates sky rocket to 29%. An event like this, among others, can push you into credit counseling and into a debt-management plan.
Keeping you in the hole forever, banks may continue to charge an over limit fee against maxed out credit cardholders. A penalty of $30 every month your credit card balance remains over the credit limit. A lot of credit cardholders will deal with the fee rather than the embarrassment of being declined.
Over limit fees can simply be another way for banks to make money at the expense of the unknowing consumer.
If banks are willing to allow charges over the limit then they should accept he profit that comes from the increased interest rate charges and be satisfied with that.
Thursday, April 30, 2009
10 Things Credit Card Companies Don't Want You To Know. Part 9 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 9 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
A credit card with great incentives, a low interest rate and just the right mix of perks and fees that are the just the right fit for you might be what you think you have, but looks can be deceiving. The credit card company can change the terms of your Utopia credit card agreement at any time.
Consumer groups report this is a sore spot with credit cardholders, and with good cause. many lenders and credit card companies defend this practice saying things like, "A credit purchase is an unsecured loan. It's the riskiest sort of lending we do, which is why it's expensive. The banks are protecting themselves."
Unhappy credit cardholders will almost always seek alternatives and credit card lending is a highly competitive market.
How do you protect yourself from having the wool pulled over your eyes? Be vigilant and pay attention to all the mail you get from your credit card company. even if it looks like junk mail.
A credit card with great incentives, a low interest rate and just the right mix of perks and fees that are the just the right fit for you might be what you think you have, but looks can be deceiving. The credit card company can change the terms of your Utopia credit card agreement at any time.
Consumer groups report this is a sore spot with credit cardholders, and with good cause. many lenders and credit card companies defend this practice saying things like, "A credit purchase is an unsecured loan. It's the riskiest sort of lending we do, which is why it's expensive. The banks are protecting themselves."
Unhappy credit cardholders will almost always seek alternatives and credit card lending is a highly competitive market.
How do you protect yourself from having the wool pulled over your eyes? Be vigilant and pay attention to all the mail you get from your credit card company. even if it looks like junk mail.
Don't Let The Swine Flu Hit You In The Wallet.
Missing work because of illness can be costly. Both for you and your employer especially if you don't have health insurance or sick days. Missing out on lost wages for any length of time can hurt you in the pocket book. Also, your employer misses out on your productivity costing them lost services or less products to produce. So with the threat of the swine flu looming not to mention the what the usual seasonal flu can do, watch for the warning signs.
The CDC and Who Web sites state that the symptoms of the H1N1 flu may include high fever, headache, tiredness, cough, runny nose, body aches, diarrhea, vomiting and sore throat. Many different illnesses, including the common cold, have symptoms similar to those caused by flu--therefore, you should check with their doctor if you experience any or several of these symptoms.
Pending additional guidance from health officials, please follow these easy to remember good health guidelines.
- Wash hands regularly--particularly before eating, after using the restroom or after touching public door handles, elevator buttons, etc.
- Avoid touching the eyes, nose or mouth when hands are not clean.
- Stay at home when you are sick.
- Cover nose and mouth with a tissue or elbow if possible when coughing or sneezing.
- Be mindful of your proximity to others who show signs of the flu (social distancing).
For information on the H1N1 flu, please visit pandemicflu.gov
The CDC and Who Web sites state that the symptoms of the H1N1 flu may include high fever, headache, tiredness, cough, runny nose, body aches, diarrhea, vomiting and sore throat. Many different illnesses, including the common cold, have symptoms similar to those caused by flu--therefore, you should check with their doctor if you experience any or several of these symptoms.
Pending additional guidance from health officials, please follow these easy to remember good health guidelines.
- Wash hands regularly--particularly before eating, after using the restroom or after touching public door handles, elevator buttons, etc.
- Avoid touching the eyes, nose or mouth when hands are not clean.
- Stay at home when you are sick.
- Cover nose and mouth with a tissue or elbow if possible when coughing or sneezing.
- Be mindful of your proximity to others who show signs of the flu (social distancing).
For information on the H1N1 flu, please visit pandemicflu.gov
Ken Lewis Is Out, But Says "We are building Bank of America for the long Term".
Ken Lewis has been taking a lot of heat lately over the recent mergers with Countrywide Home Loans and Merrill Lynch. Finally shareholders got what they wanted and Ken Lewis is out as chairman.
On Wednesday, Bank of America held its 209 Annual Meeting of Stockholders at the Belk Theatre of the Blumenthal Performing Arts Center in Charlotte, North Carolina, Several thousand shareholders, including many Bank of America associates, attended to hear CEO, Ken Lewis and CFO Joe Price report on the state of the company, and to vote on the election of the company's board of directors and 11 proposals from management, individual shareholders and shareholder groups.
At the conclusion of the shareholders voting, all of the company's 18 directors were elected. Two management proposals--one related to the ratification of the bank's auditors and the other related to revised policy on executive compensation--both passed. One shareholder proposal requiring the separation of the roles of chairman of the board of directors and chief executive officer passed.
Ken Lewis remains chief executive officer and president and will continue to serve on the board of directors. The board of elected Walter Massey as Chairman. Massey, 70, is president emeritus of Morehouse College. He has been a director of Bank of America sine 1998. Seven other proposals submitted by individual shareholders or shareholders groups did not pass.
In his remarks, Lewis complimented associates from the former Countrywide organization and Merrill Lynch, saying, "In the first quarter, what we saw was the precise rationale for acquiring Countrywide and Merrill Lynch when we did. they are two of the most important reasons Bank of America is the most profitable financial services company in the Unites States so far this year. Today, I can state without reservation that Countrywide and Merrill Lynch are not mistakes to be regretted. both are looking more and more like successes to be celebrated."
Citing the company's recently released Lending & Investing report, Lewis highlighted some of the key actions the company is taking to help drive economic recovery. "While I've seen many reports saying that overall bank lending is falling fast," Lewis said, "Bank of America actually lent more money in the first quarter than we did in the fourth--$183 billion." He also talked about the company's work in mortgage modification, community development, philanthropy and environmental sustainability.
Lewis also talked about his vision for Bank of America. "Our goal has been to build a diversified financial services company that can offer customers and clients of all sizes a wide variety of financial services that they can use to manage their financial lives," Lewis said, "and create value by delivering these products and services as a single relationship."
"We are building this company and managing for he long term," concluded Lewis, "I continue to believe we ave built the best financial company in the industry, and that our results over the long term will bear that out."
CFO J Price reported that Bank of America earned $4 billion in 2008 despite great economic challenges "because of our strong market leading positions and customer and client relationships, achieved through the tireless hard work of our dedicated associates around the globe."
Price discussed steps taken to improve the company's core strengths position and noted that last year's acquisitions of Countrywide and Merrill Lynch completed the strategic build out of the franchise. "The two most recent acquisitions have also enhanced the diversity of our earnings, as the first quarter results show," he said.
Taking a broader view, Price reviewed the company's record of revenue generation. He compared recent pre-tax, pre-provision quarterly income with quarterly provision expense, saying "this data illustrates the resources we have to manage through this down cycle." He also compares the company's earnings over the past five years with that of peers, noting that Bank of America's earning for the previous five years exceeded the nearest competitor by more than $20 billion.
Price concluded with an illustration of what management believes the company will produce during more normal times. "We estimate that the baseline potential our company should produce under more normal economic conditions is $30 billion in net income. This is not a forecast...but it gives you a perspective on the sheer power of our company."
"As demonstrated by our history of revenue and earnings, and despite today's challenges, the model we have built is working," added Price, "and we expect it to be even more powerful in the future."
This can be a very exciting time for Bank of America. I am a big fan and have seen them continue to get through some rough patches only to be stronger and better each time. This time will be know different. Can't wait to see how things turn out in the long term.
On Wednesday, Bank of America held its 209 Annual Meeting of Stockholders at the Belk Theatre of the Blumenthal Performing Arts Center in Charlotte, North Carolina, Several thousand shareholders, including many Bank of America associates, attended to hear CEO, Ken Lewis and CFO Joe Price report on the state of the company, and to vote on the election of the company's board of directors and 11 proposals from management, individual shareholders and shareholder groups.
At the conclusion of the shareholders voting, all of the company's 18 directors were elected. Two management proposals--one related to the ratification of the bank's auditors and the other related to revised policy on executive compensation--both passed. One shareholder proposal requiring the separation of the roles of chairman of the board of directors and chief executive officer passed.
Ken Lewis remains chief executive officer and president and will continue to serve on the board of directors. The board of elected Walter Massey as Chairman. Massey, 70, is president emeritus of Morehouse College. He has been a director of Bank of America sine 1998. Seven other proposals submitted by individual shareholders or shareholders groups did not pass.
In his remarks, Lewis complimented associates from the former Countrywide organization and Merrill Lynch, saying, "In the first quarter, what we saw was the precise rationale for acquiring Countrywide and Merrill Lynch when we did. they are two of the most important reasons Bank of America is the most profitable financial services company in the Unites States so far this year. Today, I can state without reservation that Countrywide and Merrill Lynch are not mistakes to be regretted. both are looking more and more like successes to be celebrated."
Citing the company's recently released Lending & Investing report, Lewis highlighted some of the key actions the company is taking to help drive economic recovery. "While I've seen many reports saying that overall bank lending is falling fast," Lewis said, "Bank of America actually lent more money in the first quarter than we did in the fourth--$183 billion." He also talked about the company's work in mortgage modification, community development, philanthropy and environmental sustainability.
Lewis also talked about his vision for Bank of America. "Our goal has been to build a diversified financial services company that can offer customers and clients of all sizes a wide variety of financial services that they can use to manage their financial lives," Lewis said, "and create value by delivering these products and services as a single relationship."
"We are building this company and managing for he long term," concluded Lewis, "I continue to believe we ave built the best financial company in the industry, and that our results over the long term will bear that out."
CFO J Price reported that Bank of America earned $4 billion in 2008 despite great economic challenges "because of our strong market leading positions and customer and client relationships, achieved through the tireless hard work of our dedicated associates around the globe."
Price discussed steps taken to improve the company's core strengths position and noted that last year's acquisitions of Countrywide and Merrill Lynch completed the strategic build out of the franchise. "The two most recent acquisitions have also enhanced the diversity of our earnings, as the first quarter results show," he said.
Taking a broader view, Price reviewed the company's record of revenue generation. He compared recent pre-tax, pre-provision quarterly income with quarterly provision expense, saying "this data illustrates the resources we have to manage through this down cycle." He also compares the company's earnings over the past five years with that of peers, noting that Bank of America's earning for the previous five years exceeded the nearest competitor by more than $20 billion.
Price concluded with an illustration of what management believes the company will produce during more normal times. "We estimate that the baseline potential our company should produce under more normal economic conditions is $30 billion in net income. This is not a forecast...but it gives you a perspective on the sheer power of our company."
"As demonstrated by our history of revenue and earnings, and despite today's challenges, the model we have built is working," added Price, "and we expect it to be even more powerful in the future."
This can be a very exciting time for Bank of America. I am a big fan and have seen them continue to get through some rough patches only to be stronger and better each time. This time will be know different. Can't wait to see how things turn out in the long term.
Financial Motivational Quote April 30, 2009
"Sometimes a noble failure serves the world as faithfully as a distinguished success."- Dowden
Wednesday, April 29, 2009
10 Things Credit Card Companies Don't Want You To Know. Part 8 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 8 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Credit card statements are crystal clear about what day your payment is due, but they're not so forthcoming about what time on that due date. Some banks have triggered consumer complaints by setting a 9 a.m. deadline on the posted payment date- which is before the mail arrives.
Chi Chi Wu, an attorney with the National Consumer Law Center, says a number of class-action lawsuits have succeeded in getting most banks to push back their payment deadline to 2 p.m., the traditional bankers closing hour, a time by which most mail delivery is complete. Even so, a spokeswoman for the American Bankers Association is unsympathetic, saying bills are due upon receipt and that banks spend a lot of money giving consumers options such as paying via phone, online, or auto bill pay. She does not understand why it's an issue to pay your bills on time, it's very easy.
You have to admit she has a point: If you cannot allow time for the U.S. mail delivery, you can always take advantage of an online or pay by phone option and if you are really in a pinch you can always overnight your payment via Fed Ex or UPS delivery, its worth it to avoid a late payment.
Credit card statements are crystal clear about what day your payment is due, but they're not so forthcoming about what time on that due date. Some banks have triggered consumer complaints by setting a 9 a.m. deadline on the posted payment date- which is before the mail arrives.
Chi Chi Wu, an attorney with the National Consumer Law Center, says a number of class-action lawsuits have succeeded in getting most banks to push back their payment deadline to 2 p.m., the traditional bankers closing hour, a time by which most mail delivery is complete. Even so, a spokeswoman for the American Bankers Association is unsympathetic, saying bills are due upon receipt and that banks spend a lot of money giving consumers options such as paying via phone, online, or auto bill pay. She does not understand why it's an issue to pay your bills on time, it's very easy.
You have to admit she has a point: If you cannot allow time for the U.S. mail delivery, you can always take advantage of an online or pay by phone option and if you are really in a pinch you can always overnight your payment via Fed Ex or UPS delivery, its worth it to avoid a late payment.
10 Things Credit Card Companies Don't Want You To Know. Part 7 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 7 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Remember travelers checks? Yes, I know those are a blast from the past- and now days credit cards has pretty much replaced travelers checks as the preferred method for making purchases abroad. Credit cards are widely accepted overseas, and they can be used in ATM's all over the world to dispense cash in the currency of whatever country you may be visiting at the time, making it very convenient. But buyer beware of hidden charges. Some banks have recently raised the rates on currency conversion from 1% to 3%. On top of that, ATM usage has its own fees attached.
Consumers Union recommends studying your credit cards' policies on foreign currency purchases before you leave home, then adjusting your spending accordingly. Credit cards issued by smaller banks may have lower fees, as do certain brand-name cards. American Express, which has long positioned itself as a card for travelers, charges a flat 2%.
Remember travelers checks? Yes, I know those are a blast from the past- and now days credit cards has pretty much replaced travelers checks as the preferred method for making purchases abroad. Credit cards are widely accepted overseas, and they can be used in ATM's all over the world to dispense cash in the currency of whatever country you may be visiting at the time, making it very convenient. But buyer beware of hidden charges. Some banks have recently raised the rates on currency conversion from 1% to 3%. On top of that, ATM usage has its own fees attached.
Consumers Union recommends studying your credit cards' policies on foreign currency purchases before you leave home, then adjusting your spending accordingly. Credit cards issued by smaller banks may have lower fees, as do certain brand-name cards. American Express, which has long positioned itself as a card for travelers, charges a flat 2%.
Financial Motivational Quote April 29, 2009
"Life has no smooth road for any of us; and in the bracing atmosphere of a high aim the very roughness stimulates the climber to steadier steps, till the legend, "over steep ways to the stars," fulfills itself."- W.C. Doane
Tuesday, April 28, 2009
10 Things Credit Card Companies Don't Want You To Know. Part 6 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 6 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Banks generally calculate interest charges in one of two ways: based on average daily balance or on something called two-cycle billing. The latter, which more card issuers are not adoption, penalizes consumers who carry a balance, even if it's only on occasion.
Here's how it works: Say you start your month with a zero balance and charge an amount that you don't pay off in full at the end of the month. If your card uses the average daily balance method to calculate interest, you are charged nothing for the month you made the purchase and interest only for subsequent months in which payment is outstanding. With two-cycle billing, interest charges begin with the day you make the purchase.
Banks defend two-cycle billing as correcting the true interest charges for credit card purchases. Ron Brooks, a spokesman for National City, says it's a way to make sure card users pay interest should they suddenly go from being transactors (those who pay every month) to revolvers (those who carry a balance).
One way to avoid the issue is to stay away from credit cards that use two-cycle billing to calculate interest charges and stuck with those that go by average daily balance. Unfortunately, it's not a permanent solution. Your card provider can switch between the two with just a 15 day notice, so you'll have to keep checking.
Banks generally calculate interest charges in one of two ways: based on average daily balance or on something called two-cycle billing. The latter, which more card issuers are not adoption, penalizes consumers who carry a balance, even if it's only on occasion.
Here's how it works: Say you start your month with a zero balance and charge an amount that you don't pay off in full at the end of the month. If your card uses the average daily balance method to calculate interest, you are charged nothing for the month you made the purchase and interest only for subsequent months in which payment is outstanding. With two-cycle billing, interest charges begin with the day you make the purchase.
Banks defend two-cycle billing as correcting the true interest charges for credit card purchases. Ron Brooks, a spokesman for National City, says it's a way to make sure card users pay interest should they suddenly go from being transactors (those who pay every month) to revolvers (those who carry a balance).
One way to avoid the issue is to stay away from credit cards that use two-cycle billing to calculate interest charges and stuck with those that go by average daily balance. Unfortunately, it's not a permanent solution. Your card provider can switch between the two with just a 15 day notice, so you'll have to keep checking.
10 Things Credit Card Companies Don't Want You To Know. Part 5 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 5 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
A few summers ago, Vicki Jacobson's college-student son, Craig used his debit card to pay for a taxi ride in Italy. The driver ran his card three separate times as a credit card and three time as a debit card , not knowing that the previous transaction had gone through. Well, I am sure you can guess what happened - Craig paid for that cab ride six times. It took months to clear up the credit card charges, which finally got resolved, but it was much more difficult to get the debit card transactions cleared up.
Why was there so much trouble with the debit card transactions? Debit cards resemble credit cards in all visible ways, but offer the consumer less protection. Some debit cards offer purchase protection, meaning you can replace a damaged item within 90 days, but many did not.
And although unauthorized transactions, such as the three charges on Craig's credit card should be refunded by the issuer, banks are less motivated to speedily resolve cases involving debit cards then credit cards, why is that? Well, debit cards draw on a checking account, meaning they are essentially checks in plastic form. Credit cards are in constitute a loan, so it's the banks money , giving it more reason to protect it.
A few summers ago, Vicki Jacobson's college-student son, Craig used his debit card to pay for a taxi ride in Italy. The driver ran his card three separate times as a credit card and three time as a debit card , not knowing that the previous transaction had gone through. Well, I am sure you can guess what happened - Craig paid for that cab ride six times. It took months to clear up the credit card charges, which finally got resolved, but it was much more difficult to get the debit card transactions cleared up.
Why was there so much trouble with the debit card transactions? Debit cards resemble credit cards in all visible ways, but offer the consumer less protection. Some debit cards offer purchase protection, meaning you can replace a damaged item within 90 days, but many did not.
And although unauthorized transactions, such as the three charges on Craig's credit card should be refunded by the issuer, banks are less motivated to speedily resolve cases involving debit cards then credit cards, why is that? Well, debit cards draw on a checking account, meaning they are essentially checks in plastic form. Credit cards are in constitute a loan, so it's the banks money , giving it more reason to protect it.
Financial Motivational Quote April 28, 2009
"What we anticipate seldom occurs, what we least expected generally happens."- Benjamin Disraeli
Monday, April 27, 2009
White Paper Report Is Issued By Federal Reserve On Bank Stress Test
Government officials recently conducted stress tests on 19 large financial institutions with the stated goal of helping to assess the health of the banking industry and the ability of banks to weather weak economic conditions. On April 24, the Federal Reserve issued a white paper report outlining the methodology used to conduct the stress test. The white paper is intended to assist analysts and members of the public in understanding the results of the stress test, formally called the Supervisory Capital Assessment Program.
The federal Reserve met with the industry banks on Friday, asking for feedback on preliminary results of the test. the public announcement of the results are expected in early May.
The federal Reserve met with the industry banks on Friday, asking for feedback on preliminary results of the test. the public announcement of the results are expected in early May.
10 Things Credit Card Companies Don't Want You To Know. Part 4 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 4 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
In this hyper competitive credit card marketplace, rewards are a way for banks to target big- spending niche audiences. For instance- frequent flyer's, frequent hotel stayers, or big time shoppers! But what people don't know is that these programs come with catches, such as high interest rates and/or high annual fees, so do your homework, a good rewards card done not always make financial sense for just anyone.
Before signing up for a rewards card figure out how much you have to spend to ear the incentives from any given card. If the math works out to anything less than one penny earned per dollar spend (or a mile per dollar, in the case of mileage cards), then you can do better.
Also, be sure to look for rewards that best suit your needs, For example if you want an abundance of options, from retail goods and services to charitable donations. American Express Membership Rewards cards let you accumulate points at the rate of a penny per dollar spend- and double that at gas stations and drugstores. Or if it's air miles you are after then look into the United Mileage Plus Signature Visa is one card that stands out from the pack, with its one-mile-per-dollar ratio and host of travel benefits, including upgrades.
In this hyper competitive credit card marketplace, rewards are a way for banks to target big- spending niche audiences. For instance- frequent flyer's, frequent hotel stayers, or big time shoppers! But what people don't know is that these programs come with catches, such as high interest rates and/or high annual fees, so do your homework, a good rewards card done not always make financial sense for just anyone.
Before signing up for a rewards card figure out how much you have to spend to ear the incentives from any given card. If the math works out to anything less than one penny earned per dollar spend (or a mile per dollar, in the case of mileage cards), then you can do better.
Also, be sure to look for rewards that best suit your needs, For example if you want an abundance of options, from retail goods and services to charitable donations. American Express Membership Rewards cards let you accumulate points at the rate of a penny per dollar spend- and double that at gas stations and drugstores. Or if it's air miles you are after then look into the United Mileage Plus Signature Visa is one card that stands out from the pack, with its one-mile-per-dollar ratio and host of travel benefits, including upgrades.
10 Things Credit Card Companies Don't Want You To Know. Part 3 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 3 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
Most parents send their children off to college knowing that they will be bombarded with credit card offers, but what parent's don't know is that credit card companies are taking their marketing one step farther, they are hitting up high school students. College students are considered "good risks" to creditors, because they are just starting out and they have unlimited earning potential and now high school students are being put into that category as well.
Robert D. Manning, author of "Credit Card Nation" and a professor at the Rochester Institute of Technology says that most parents do not realize how early a child's name, address, and other information, can turn up in the databases used by credit card companies to market their products- or that children as young as 16 can get credit cards without parental consent.
Creditors know that if kids get in trouble that their parents will usually pay to bail them out.
So as a parent what can you do to protect your child's financial future? Protect your child's information and assume that all requests, however legitimate, will land in a database somewhere. Gift cards, for instance, may offer protection if lost or stolen, but they do require personal information. Manning and other experts advise teaching teens about credit well before they get their first credit cards and monitor their spending as they learn to use them.
Most parents send their children off to college knowing that they will be bombarded with credit card offers, but what parent's don't know is that credit card companies are taking their marketing one step farther, they are hitting up high school students. College students are considered "good risks" to creditors, because they are just starting out and they have unlimited earning potential and now high school students are being put into that category as well.
Robert D. Manning, author of "Credit Card Nation" and a professor at the Rochester Institute of Technology says that most parents do not realize how early a child's name, address, and other information, can turn up in the databases used by credit card companies to market their products- or that children as young as 16 can get credit cards without parental consent.
Creditors know that if kids get in trouble that their parents will usually pay to bail them out.
So as a parent what can you do to protect your child's financial future? Protect your child's information and assume that all requests, however legitimate, will land in a database somewhere. Gift cards, for instance, may offer protection if lost or stolen, but they do require personal information. Manning and other experts advise teaching teens about credit well before they get their first credit cards and monitor their spending as they learn to use them.
Sunday, April 26, 2009
10 Things Credit Card Companies Don't Want You To Know. Part 2 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We continue with Part 2 with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
2. "When it comes to identity theft, we're part of the problem."
Tony Sciulli of Santa Barbara, an identity theft victim, says it all started with a forged credit card application. A $3,000 balance was mysteriously transferred to a new credit card in his name, followed by a ready made check billed to one of his other cards. What can you do to avoid this sort of low tech thievery? Buy a shredder, and minimize the credit credit applications coming to your house by registering at OptOutPrescreen.com
But paper solicitations are only the beginning. As Internet security expert and author Bruce Schneier warns, "Data about you is not under your control." He points to examples such as May 2005 case involving Bank of America and Wachovia, in which a man posing as collection agent paid bank employees for customer data in New Jersey. The banks notified customers their data may have been compromised and offered to help watch their accounts for suspicious activity. (The man, Orazio Lembo, pleaded guilty in March 2007 and was sentenced to five years in prison and fined $20,000.)
But John Hall, a spokesman for the American Bankers Association, insists that banks have "Pentagon level security." His advice:"Monitor your accounts. Protect your passwords and your computer."
2. "When it comes to identity theft, we're part of the problem."
Tony Sciulli of Santa Barbara, an identity theft victim, says it all started with a forged credit card application. A $3,000 balance was mysteriously transferred to a new credit card in his name, followed by a ready made check billed to one of his other cards. What can you do to avoid this sort of low tech thievery? Buy a shredder, and minimize the credit credit applications coming to your house by registering at OptOutPrescreen.com
But paper solicitations are only the beginning. As Internet security expert and author Bruce Schneier warns, "Data about you is not under your control." He points to examples such as May 2005 case involving Bank of America and Wachovia, in which a man posing as collection agent paid bank employees for customer data in New Jersey. The banks notified customers their data may have been compromised and offered to help watch their accounts for suspicious activity. (The man, Orazio Lembo, pleaded guilty in March 2007 and was sentenced to five years in prison and fined $20,000.)
But John Hall, a spokesman for the American Bankers Association, insists that banks have "Pentagon level security." His advice:"Monitor your accounts. Protect your passwords and your computer."
10 Things Credit Card Companies Don't Want You To Know. Part 1 0f 10
April has been Credit Card Question and Answer month here at Financial Elite. We are going to end the month with information provided from an article from SmartMoney about the little known rules that are costing you money and putting your credit, your identity and your family at risk.
1. "We're just waiting for you to screw up."
Many things can cause your credit card interest rate to go way up into the stratosphere, but nothing faster than universal default. You can make all your credit card payments month after month for a long time, but fall behind on your utility bills and all of a sudden you are a deadbeat and you will be charged accordingly. Interest rates can change at a moments notice, from low and reasonable to up to 35%.
Credit card companies say the reason they do this is to manage risk. Consumers groups disagree, because many people in universal default aren't deadbeats by any means. For example, you dispute a medical bill or are waiting for an insurance snafu to be resolved. If a billing clerk kicks it to collections, you're in universal default. Or let's say your credit score drops--a common event that may be entirely unrelated to your bill paying behavior. That's also likely to push your interest rate higher.
The best way to avoid this problem is to pay your bills on time. Bankrate.com, a personal finance Web site, further advises that if you have a disputed bill, resolve it before it reaches collection status.
1. "We're just waiting for you to screw up."
Many things can cause your credit card interest rate to go way up into the stratosphere, but nothing faster than universal default. You can make all your credit card payments month after month for a long time, but fall behind on your utility bills and all of a sudden you are a deadbeat and you will be charged accordingly. Interest rates can change at a moments notice, from low and reasonable to up to 35%.
Credit card companies say the reason they do this is to manage risk. Consumers groups disagree, because many people in universal default aren't deadbeats by any means. For example, you dispute a medical bill or are waiting for an insurance snafu to be resolved. If a billing clerk kicks it to collections, you're in universal default. Or let's say your credit score drops--a common event that may be entirely unrelated to your bill paying behavior. That's also likely to push your interest rate higher.
The best way to avoid this problem is to pay your bills on time. Bankrate.com, a personal finance Web site, further advises that if you have a disputed bill, resolve it before it reaches collection status.
Looking For Good Economic News.
More and more good economic news has been sprouting up, but tales of doom and gloom still love to rear their ugly head.
Financial Elite, as always, continues to give tips on how to improve your financial life. But we also report stories on the good news happening in the economy.
Fellow blogger Eldon Mast over at "The Good News Economist" continuously knocks down the tales of doom and gloom and posts nothing but good economic news.
In March, NBC anchor Brian Williams said, He'd been hearing repeatedly from people he met on the street or viewers who send e-mails: The news was so bad every night that it's a burden to watch. One viewer wrote: "We all know it's bad, but the news makes us feel like crawling a rock."
Williams encouraged viewers to nominate people doing good work, random or regular acts of kindness in a cruel economy, and began telling some of their stories.
There was a story of a man who kept a full can of gas in his trunk that gives it to people who have run out of gas, asking only that they do the same for someone else. Another woman goes up to strangers on the street and gives them money. One man nominated his landlord, saying he reduced the rent and even helps pay his bills.
We need this trend of good news to continue . Please share your good news and positive stories with us. Remember: good news=good economy.
Financial Elite, as always, continues to give tips on how to improve your financial life. But we also report stories on the good news happening in the economy.
Fellow blogger Eldon Mast over at "The Good News Economist" continuously knocks down the tales of doom and gloom and posts nothing but good economic news.
In March, NBC anchor Brian Williams said, He'd been hearing repeatedly from people he met on the street or viewers who send e-mails: The news was so bad every night that it's a burden to watch. One viewer wrote: "We all know it's bad, but the news makes us feel like crawling a rock."
Williams encouraged viewers to nominate people doing good work, random or regular acts of kindness in a cruel economy, and began telling some of their stories.
There was a story of a man who kept a full can of gas in his trunk that gives it to people who have run out of gas, asking only that they do the same for someone else. Another woman goes up to strangers on the street and gives them money. One man nominated his landlord, saying he reduced the rent and even helps pay his bills.
We need this trend of good news to continue . Please share your good news and positive stories with us. Remember: good news=good economy.
Should I Stop Contributing To My 401K If I Want To Pay Off My Credit Cards?
Not really. Especially if your employer offers a company match. No matter how much credit card debt you have or how out of whack your finances are. Don't miss out on this free money. No matter if your employer matches dollar for dollar, matches half of what you contribute, or matches even a quarter of what you put in, you don't want to pass this up.
Financial Motivational Quote April 26, 2009
"The most successful people in life are generally those who have the best information."- Benjamin Disraeli.
Saturday, April 25, 2009
Obama Continues Credit Card Smackdown Against Credit Credit Card Companies
Credit card companies met with President Obama on Thursday to discuss the smackdown against interest rate hikes and excessive fees on consumer credit cards.
Consumer groups and congressional Democrats are rewriting the rules of lending practices by credit card companies, banks, and other lenders. The house bill led by Rep. Carolyn Maloney, is similar to one passed last year.
"This bill cracks down on some of the most outrageous abuses," Maloney said. "My bill levels the playing field so consumers have more control over their credit."
Bank of America Global Credit Services President Ric Struthers, along with 14 other financial services executives and representatives from the American Bankers Association (ABA), met with President Obama, Treasury Secretary Timothy Geithner, National Economic Council Director Larry Summers and other officials at the White House to discuss important issues regarding credit cards.
The group discussed the importance of credit cards to consumers, small businesses and the U.S. economy. They also covered trends in credit card use and lending. They also talked about the economic factors affecting the credit card business and consumers, including rising unemployment and the recession.
"It was a productive meeting, said Struthers. "I'm glad we had the opportunity to talk with the president and his administration. We look forward to ongoing dialogues with the administration on this important topic."
According to Struthers, during the meeting the president stressed that he wants a set of rules for credit cards that are sustainable, clear and include strong consumer protections. And he asked the industry leaders to be mindful of impact its actions are having on businesses.
One of four executives chosen to make formal comments, Struthers' message to the president focused on the effects of the economy on the credit card industry:
- We understand fully the severe impact these conditions are having on the health and stability of the U.S. economy, businesses and our customers. What at first was assumed to be a short, relatively shallow slowdown, has become much longer and deeper than anyone anticipated.
- The current economy is also affecting all credit card issuers. Credit card issuers lost money in the fourth quarter of 2008 and first quarter of 2009 driven by increased pressure on consumers from rising unemployment, declining consumer confidence and slowing discretionary spending.
- Our goal is to find the right balance in meeting the credit needs of our customers, providing a reasonable return for our shareholders and continuing to do all we can for consumers who are in financial distress.
- To support economic growth and the health of the American consumer, financial services companies recognize the importance of continuing to lend. And in this difficult environment, we are making every good loan we can. For example, Bank of America extended $8 billion of unsecured consumer credit during fourth quarter of 2008 and another $6 billion in the first quarter of 2009.
Following the meeting, the ABA issued a statement: "The president did raise concerns about certain issues surrounding credit cards. The card executives listened carefully to those concerns and agreed to work with the administration to address them."
See the question and answer session with Bank of America's Ric Struthers regarding the impact of the economic environment and increased regulations against credit card companies.
Consumer groups and congressional Democrats are rewriting the rules of lending practices by credit card companies, banks, and other lenders. The house bill led by Rep. Carolyn Maloney, is similar to one passed last year.
"This bill cracks down on some of the most outrageous abuses," Maloney said. "My bill levels the playing field so consumers have more control over their credit."
Bank of America Global Credit Services President Ric Struthers, along with 14 other financial services executives and representatives from the American Bankers Association (ABA), met with President Obama, Treasury Secretary Timothy Geithner, National Economic Council Director Larry Summers and other officials at the White House to discuss important issues regarding credit cards.
The group discussed the importance of credit cards to consumers, small businesses and the U.S. economy. They also covered trends in credit card use and lending. They also talked about the economic factors affecting the credit card business and consumers, including rising unemployment and the recession.
"It was a productive meeting, said Struthers. "I'm glad we had the opportunity to talk with the president and his administration. We look forward to ongoing dialogues with the administration on this important topic."
According to Struthers, during the meeting the president stressed that he wants a set of rules for credit cards that are sustainable, clear and include strong consumer protections. And he asked the industry leaders to be mindful of impact its actions are having on businesses.
One of four executives chosen to make formal comments, Struthers' message to the president focused on the effects of the economy on the credit card industry:
- We understand fully the severe impact these conditions are having on the health and stability of the U.S. economy, businesses and our customers. What at first was assumed to be a short, relatively shallow slowdown, has become much longer and deeper than anyone anticipated.
- The current economy is also affecting all credit card issuers. Credit card issuers lost money in the fourth quarter of 2008 and first quarter of 2009 driven by increased pressure on consumers from rising unemployment, declining consumer confidence and slowing discretionary spending.
- Our goal is to find the right balance in meeting the credit needs of our customers, providing a reasonable return for our shareholders and continuing to do all we can for consumers who are in financial distress.
- To support economic growth and the health of the American consumer, financial services companies recognize the importance of continuing to lend. And in this difficult environment, we are making every good loan we can. For example, Bank of America extended $8 billion of unsecured consumer credit during fourth quarter of 2008 and another $6 billion in the first quarter of 2009.
Following the meeting, the ABA issued a statement: "The president did raise concerns about certain issues surrounding credit cards. The card executives listened carefully to those concerns and agreed to work with the administration to address them."
See the question and answer session with Bank of America's Ric Struthers regarding the impact of the economic environment and increased regulations against credit card companies.
Financial Motivational Quote April 25, 2009
"The Duke of Wellington brought to the post of first minister immortal fame,--a quality of success which would almost seem to include all others."- Benjamin Disraeli
Another Week Ends With Signs Of Economic Recovery
Another great week for economic recovery news. Beginning in the banking sector with Bank of America reporting a $4.2 billion profit for the first quarter and Wells Fargo beating their original estimate of $3 billion to end with a first quarter profit of $3.05 billion.
The week ended with home sales showing signs of revival. The housing market decline may be near an end according to a report on Friday. "All signs are pointing to stabilization in market conditions, which is due to lower prices," Michael Larson, a real estate analyst at Weiss research, said. "We still have a problem with unemployment, and that's why any rebound we see will be muted."
A report released Thursday showed sales of existing homes fell in March, but analysts say the housing market is showing sings of stabilization.
"Sales are volatile month-to-month, but the trend appears to be flattening off," Ian Shepherdson, economist at High Frequency Economics, said.
The week also ended with Amazon sales surge as Kindle takes off. On Thursday, Amazon.com beat Wall Street expectations for first quarter earnings and sales as it drew more customers online and its Kindle electronic reader gained momentum.
Stocks rallied on Friday on Ford and American Express reported their first quarter results.Ford's revenue plunged versus a year ago but topped estimates.
Treasury Secretary, Timothy Geithner reveals the global economy is on the mend. "In recent weeks, there have been some encouraging signs that the global economic downturn may be slackening," he wrote. "Conditions in some financial markets have improved and the decline in world trade may be abating."
Things are looking up. Looking for more of the same next week.
The week ended with home sales showing signs of revival. The housing market decline may be near an end according to a report on Friday. "All signs are pointing to stabilization in market conditions, which is due to lower prices," Michael Larson, a real estate analyst at Weiss research, said. "We still have a problem with unemployment, and that's why any rebound we see will be muted."
A report released Thursday showed sales of existing homes fell in March, but analysts say the housing market is showing sings of stabilization.
"Sales are volatile month-to-month, but the trend appears to be flattening off," Ian Shepherdson, economist at High Frequency Economics, said.
The week also ended with Amazon sales surge as Kindle takes off. On Thursday, Amazon.com beat Wall Street expectations for first quarter earnings and sales as it drew more customers online and its Kindle electronic reader gained momentum.
Stocks rallied on Friday on Ford and American Express reported their first quarter results.Ford's revenue plunged versus a year ago but topped estimates.
Treasury Secretary, Timothy Geithner reveals the global economy is on the mend. "In recent weeks, there have been some encouraging signs that the global economic downturn may be slackening," he wrote. "Conditions in some financial markets have improved and the decline in world trade may be abating."
Things are looking up. Looking for more of the same next week.
Friday, April 24, 2009
Financial Motivational Quote April 24, 2009
"As a rule, he or she who has the most information will have the greatest success in life."- Benjamin Disraeli
I Haven't Paid My Credit Card Bills In Years. Why Am I Being Told I Still Owe Money?
Well, you do. But there is only so long a debt collection agency can hassle you. You need to see what your state's statute of limitations is on debt collection. Every state has a time when the clock starts running on the statute of limitations on your passed due credit card debt. This time frame begins starting with the date you failed to make a payment that was due, as long as you never make another payment on that credit card account. The best way to determine when the statute starts against your debt is to get a copy of your credit report. It shows the dates you were late and when it was reported by your creditors. So if your states statute of limitations is say five years, and your last payment was April 24, 2004, then on April 24, 2009 your statue of limitations on the debt would have run out. That is assuming you haven't made another payment on that account. Also, be aware that the statute of limitations applies to different types of debt. The statute of limitations is different on credit cards, mortgages, car loans, or personal loans. Another thing to consider is if you actually make a payment to a collection agency or even tell them you are going to make a payment your statue of limitations may start all over again.
To find statutes of limitations in your state visit fair-debt-collection.com
To find statutes of limitations in your state visit fair-debt-collection.com
Thursday, April 23, 2009
Bank of America Answers Questions Why There Are Interest Rate Hikes On Credit Cards.
With credit card horror stories every where and legislation trying to get passed against interest rate hikes and excessive fees, Bank of America gives us the reason why banks do all that.
With the overhaul of credit card issuers announcing rate changes, the credit card industry has been the main topics discussed around office water coolers as well as in public sector. The changes in the credit card industry were recently discussed during Bank of America's Global Town Hall on April 20th. The following is a discussion with Bank of America Global Card Services President Ric Struthers on Bank of America's credit card pricing and what the company is doing to help struggling consumers.
Today, you and several other credit card execs along with the American Bankers Association are going to a meeting at the White House to discuss the current state of the credit card industry. What do you expect?
Struthers: I'm looking forward to a meaningful dialogue about the current economic environment, credit card lending and the impact that the credit card regulations recently issued by the Federal Reserve will have on the industry and consumers.
There have been a number of headlines about credit card issuers increasing interest rates on credit cards. What is Bank of America doing?
Struthers: In the beginning of April, we notified a small portion of our customers that we are increasing rates on their accounts. Some accounts were repriced because their interest rate is currently 10% or lower, a rate significantly less that our cost to do business in the current market. Another group of accounts were repriced due to our business-as-usual process of adjusting account pricing based on periodic review of account risk. It's important to not that these two changes affected fewer than 10% of our total portfolio. Incidentally, there's a third business-as-usual strategy that we use to reprice accounts that we refer to as "trigger", which happens when an account falls past due or goes over limit more then two times in 12 months. We understand that in the current economic environment increased in credit card rates can be an emotional issue for many of our customers, including our family and friends. As Bank of America associates, it's important to keep in mind that in a given year, the vast majority of our customers experience no rate increase. For example, in 2008 more than 90% of our customers had the same or a lower rate at the end of the year than they did at the beginning of the year. In fact, during the first quarter alone, we brought down prices on 400,000 customer accounts.
It's also important to be aware that when we do need to make a pricing change, we make every effort to be as transparent and as clear as possible in our communications, making sure our customers are fully aware of the increase and the choices they have- one of which is choosing to reject the rate increase. If they choose to opt out of the increase, we have several processes that make it as convenient as possible for them to do so, including opting out by phone.
Why did you increase the pricing on accounts with rates less than 10%?
Struthers: It was a difficult decision for us. Our customers are our top priority, and we understand that many of them are under financial strain in this difficult economy. However, the credit card industry is also operating under difficult conditions that are resulting in significant increases in our costs of doing business. And, unfortunately, low credit card interest rates that were set in a better economic environment, such as rates lower than 10%, are just not sufficient to cover these rising costs. Therefore, on this small group of accounts, we increased the rate to 13-14% on average.
At the end of the day, it is our responsibility to do all we can to operate profitably so that we can help ensure the strength and stability of Bank of America, continue to lend in support of the economy, and provide the level of value and service that our customers need and expect.
Why are your costs rising?
Struthers: The credit card industry is facing a number of challenges that are leading to increased operating costs.
As you might expect, as the economy has worsened, losses have risen to historically high levels as customers have been unable to make payments on their loans. In Global Card Services, we saw $5.3 billion in losses during the first quarter of this year. That is on top of losses of $4.5 billion in the fourth quarter of 2008. Banks also are required to set aside reserves to guard against future losses. As you can imagine, that's continuing to grow into a pretty big number.
At the same time, we are preparing for significant changed in the way we do business because of the new federal regulations that will become effective in July 2010.
What are you doing to help customers in this environment?
Struthers: We are doing all we can to help as many customers as we can. In the first quarter, we modified more than 375,000 accounts across all our businesses. We expect to modify 1.5 million to 2 million accounts in 2009, compared to fewer than 1 million in 2008. We have many programs that can help customers even before they fall behind.
Unfortunately, there are some circumstances where we cannot modify an account. We make every effort to be as flexible as we can; however credit card workout programs are closely regulated by the Office of the Comptroller of the Currency, with strict rules and guidelines around how much we can modify accounts. We are constantly working with our regulators to improve and create new programs to better meet our customers' needs. In fact, we are working closely with the National Foundation for Credit Counseling in support of increased flexibility in workout programs across the industry. In addition, we provide financial support on an actual basis of more than $30 million to nonprofit credit counseling agencies that help people work their way out of financial distress.
The commitment to help out customers is consistent in our businesses around the globe. For instance, in the U.K. we recently partnered with the government and our industry to introduce a 60-day "breathing space" principle for customers who are working with a not-for-profit money advice organization. And in Canada, we regularly work with the nonprofit Canada Credit Counseling Services agencies across the country to help consumers who are experiencing financial difficulties.
Can you share your thoughts on the future of credit card business?
Struthers: Over the next few years the credit card business will undergo considerable change. The cumulative effect of regulatory by the Federal Reserve, pending legislation in both houses of Congress, shifting consumer behaviors and a deteriorating economy will alter the way banks think about consumer credit. While we are still working out all the details of how our operations will be transformed, we have some initial thoughts about what the new credit card environment will look like:
- As we are beginning to see today, banks are spending much more time assessing the risk of people they lend to and, in turn, consumers, are more thoughtful about their spending and borrowing habits.
-Credit card terms and conditions, including the costs of using credit cards, will be communicated in ways intended to make them clearer and easier to understand.
- Restrictions on our ability to change interest rates will likely result in a normalisation of credit card rates, we'll see fewer customers at very low or very high interest rates and a greater concentration of customers somewhere in the middle. In general, this likely will mean consumers will have a higher rate than they do today.
What won't change is the value of the credit card product to consumers around the world. And, at Bank of America, we are- and we plan to lead the way in- ensuring the delivery of exceptional products and services. No other financial product is a safer and more flexible payment tool, enabling customers to make a purchase today and pay it back over time as they choose.
With the overhaul of credit card issuers announcing rate changes, the credit card industry has been the main topics discussed around office water coolers as well as in public sector. The changes in the credit card industry were recently discussed during Bank of America's Global Town Hall on April 20th. The following is a discussion with Bank of America Global Card Services President Ric Struthers on Bank of America's credit card pricing and what the company is doing to help struggling consumers.
Today, you and several other credit card execs along with the American Bankers Association are going to a meeting at the White House to discuss the current state of the credit card industry. What do you expect?
Struthers: I'm looking forward to a meaningful dialogue about the current economic environment, credit card lending and the impact that the credit card regulations recently issued by the Federal Reserve will have on the industry and consumers.
There have been a number of headlines about credit card issuers increasing interest rates on credit cards. What is Bank of America doing?
Struthers: In the beginning of April, we notified a small portion of our customers that we are increasing rates on their accounts. Some accounts were repriced because their interest rate is currently 10% or lower, a rate significantly less that our cost to do business in the current market. Another group of accounts were repriced due to our business-as-usual process of adjusting account pricing based on periodic review of account risk. It's important to not that these two changes affected fewer than 10% of our total portfolio. Incidentally, there's a third business-as-usual strategy that we use to reprice accounts that we refer to as "trigger", which happens when an account falls past due or goes over limit more then two times in 12 months. We understand that in the current economic environment increased in credit card rates can be an emotional issue for many of our customers, including our family and friends. As Bank of America associates, it's important to keep in mind that in a given year, the vast majority of our customers experience no rate increase. For example, in 2008 more than 90% of our customers had the same or a lower rate at the end of the year than they did at the beginning of the year. In fact, during the first quarter alone, we brought down prices on 400,000 customer accounts.
It's also important to be aware that when we do need to make a pricing change, we make every effort to be as transparent and as clear as possible in our communications, making sure our customers are fully aware of the increase and the choices they have- one of which is choosing to reject the rate increase. If they choose to opt out of the increase, we have several processes that make it as convenient as possible for them to do so, including opting out by phone.
Why did you increase the pricing on accounts with rates less than 10%?
Struthers: It was a difficult decision for us. Our customers are our top priority, and we understand that many of them are under financial strain in this difficult economy. However, the credit card industry is also operating under difficult conditions that are resulting in significant increases in our costs of doing business. And, unfortunately, low credit card interest rates that were set in a better economic environment, such as rates lower than 10%, are just not sufficient to cover these rising costs. Therefore, on this small group of accounts, we increased the rate to 13-14% on average.
At the end of the day, it is our responsibility to do all we can to operate profitably so that we can help ensure the strength and stability of Bank of America, continue to lend in support of the economy, and provide the level of value and service that our customers need and expect.
Why are your costs rising?
Struthers: The credit card industry is facing a number of challenges that are leading to increased operating costs.
As you might expect, as the economy has worsened, losses have risen to historically high levels as customers have been unable to make payments on their loans. In Global Card Services, we saw $5.3 billion in losses during the first quarter of this year. That is on top of losses of $4.5 billion in the fourth quarter of 2008. Banks also are required to set aside reserves to guard against future losses. As you can imagine, that's continuing to grow into a pretty big number.
At the same time, we are preparing for significant changed in the way we do business because of the new federal regulations that will become effective in July 2010.
What are you doing to help customers in this environment?
Struthers: We are doing all we can to help as many customers as we can. In the first quarter, we modified more than 375,000 accounts across all our businesses. We expect to modify 1.5 million to 2 million accounts in 2009, compared to fewer than 1 million in 2008. We have many programs that can help customers even before they fall behind.
Unfortunately, there are some circumstances where we cannot modify an account. We make every effort to be as flexible as we can; however credit card workout programs are closely regulated by the Office of the Comptroller of the Currency, with strict rules and guidelines around how much we can modify accounts. We are constantly working with our regulators to improve and create new programs to better meet our customers' needs. In fact, we are working closely with the National Foundation for Credit Counseling in support of increased flexibility in workout programs across the industry. In addition, we provide financial support on an actual basis of more than $30 million to nonprofit credit counseling agencies that help people work their way out of financial distress.
The commitment to help out customers is consistent in our businesses around the globe. For instance, in the U.K. we recently partnered with the government and our industry to introduce a 60-day "breathing space" principle for customers who are working with a not-for-profit money advice organization. And in Canada, we regularly work with the nonprofit Canada Credit Counseling Services agencies across the country to help consumers who are experiencing financial difficulties.
Can you share your thoughts on the future of credit card business?
Struthers: Over the next few years the credit card business will undergo considerable change. The cumulative effect of regulatory by the Federal Reserve, pending legislation in both houses of Congress, shifting consumer behaviors and a deteriorating economy will alter the way banks think about consumer credit. While we are still working out all the details of how our operations will be transformed, we have some initial thoughts about what the new credit card environment will look like:
- As we are beginning to see today, banks are spending much more time assessing the risk of people they lend to and, in turn, consumers, are more thoughtful about their spending and borrowing habits.
-Credit card terms and conditions, including the costs of using credit cards, will be communicated in ways intended to make them clearer and easier to understand.
- Restrictions on our ability to change interest rates will likely result in a normalisation of credit card rates, we'll see fewer customers at very low or very high interest rates and a greater concentration of customers somewhere in the middle. In general, this likely will mean consumers will have a higher rate than they do today.
What won't change is the value of the credit card product to consumers around the world. And, at Bank of America, we are- and we plan to lead the way in- ensuring the delivery of exceptional products and services. No other financial product is a safer and more flexible payment tool, enabling customers to make a purchase today and pay it back over time as they choose.
Credit Card Smackdown Continues To Make Progress.
The House panel has OK'd the bill limiting increases on credit card interest rates and fees. But there are likely to be changes before a full vote as the White House takes a more active role.
Washington (CNNMoney.com)-- A key house panel on Wednesday advanced a bill to crack down on credit card interest rates and fees amid signs the Obama administration will try to toughen the bill further before it goes to a full vote.
The House Financial Services Committee passed the bill 48-19; nine Republicans joined the panel's Democrats in voting for it. the bill could go to the full House for a vote as soon as next week.
The committee vote came as President Obama gets set to meet Thursday with 14 executives from the largest credit card companies.
Read The Full Story...
Washington (CNNMoney.com)-- A key house panel on Wednesday advanced a bill to crack down on credit card interest rates and fees amid signs the Obama administration will try to toughen the bill further before it goes to a full vote.
The House Financial Services Committee passed the bill 48-19; nine Republicans joined the panel's Democrats in voting for it. the bill could go to the full House for a vote as soon as next week.
The committee vote came as President Obama gets set to meet Thursday with 14 executives from the largest credit card companies.
Read The Full Story...
Bank of America to Begin Opening Customer-Driven Banking Centers.
When I started my life in finance, working as I teller, I often wondered why banks did not operate like investment firms. Where you make an appointment and went into an office to speak to a knowledgeable professional regarding your investment needs. People so often complained of long waits and lack of privacy I don't why Bank of America did not think of this sooner.
As always Bank of America continually delivers new capabilities targeted to the evolving needs of customers. It recently opened a banking center at the EpiCentre restaurant and retail development in Charlotte and soon to be opened banking centers at Bank of America Tower at One Bryant Park this month and 86th & Lexington in August in New York City are examples of this approach. The centers were specially designed as a direct result of listening to and learning from customers about how they want to interact with us.
The banking centers combine the use of technology such as online experience and technology based resources with the personal attention of a banking center associate, "This design allows us to test new concepts to better meet the evolving needs and preferences of our customers," said Ken Jackowitz, Cross Channel Design and Transformation executive. "The layout helps customers quickly navigate to the right area to meet their need, allowing them to work independently or with an associate."
The results from these banking centers will be used to further develop the experience to better meet preferences of customers. "The seamless combination of interactive technology, clear marketing communications and knowledgeable, customer driven associates guide, inspire and add value for customers who choose to casually browse, intentionally shop or purposefully collaborate to achieve financial well being at Bank of America," said Janet LaCasse, retail Program Execution executive.
Some of the elements that are unique to these banking centers include the following:
- Interactive surface computers and Learn PCs allow customers to learn about concepts such as managing their finances, and to explore products as Online Banking and Mobile Banking.
- Bank By Appointment (BBA) helps customers save time by allowing them to save time by allowing them to book an appointment before coming to the banking center. Once there, associates use BBA to place customers in a virtual queue, displayed on monitors throughout the store. By knowing their place in line, customers are free to actively browse while waiting to meet with an associate.
- Videoconferencing expands the banking center team by allowing customers to interact with experts from other areas of the bank not located at the banking center, such as a mortgage loan officer or Customer Solutions specialists.
- Interactive product materials that customers can e-mail home to continue their research and learning.
I think this is a great concept and look forward to seeing these branches make their way throughout the country.
As always Bank of America continually delivers new capabilities targeted to the evolving needs of customers. It recently opened a banking center at the EpiCentre restaurant and retail development in Charlotte and soon to be opened banking centers at Bank of America Tower at One Bryant Park this month and 86th & Lexington in August in New York City are examples of this approach. The centers were specially designed as a direct result of listening to and learning from customers about how they want to interact with us.
The banking centers combine the use of technology such as online experience and technology based resources with the personal attention of a banking center associate, "This design allows us to test new concepts to better meet the evolving needs and preferences of our customers," said Ken Jackowitz, Cross Channel Design and Transformation executive. "The layout helps customers quickly navigate to the right area to meet their need, allowing them to work independently or with an associate."
The results from these banking centers will be used to further develop the experience to better meet preferences of customers. "The seamless combination of interactive technology, clear marketing communications and knowledgeable, customer driven associates guide, inspire and add value for customers who choose to casually browse, intentionally shop or purposefully collaborate to achieve financial well being at Bank of America," said Janet LaCasse, retail Program Execution executive.
Some of the elements that are unique to these banking centers include the following:
- Interactive surface computers and Learn PCs allow customers to learn about concepts such as managing their finances, and to explore products as Online Banking and Mobile Banking.
- Bank By Appointment (BBA) helps customers save time by allowing them to save time by allowing them to book an appointment before coming to the banking center. Once there, associates use BBA to place customers in a virtual queue, displayed on monitors throughout the store. By knowing their place in line, customers are free to actively browse while waiting to meet with an associate.
- Videoconferencing expands the banking center team by allowing customers to interact with experts from other areas of the bank not located at the banking center, such as a mortgage loan officer or Customer Solutions specialists.
- Interactive product materials that customers can e-mail home to continue their research and learning.
I think this is a great concept and look forward to seeing these branches make their way throughout the country.
Stocks Try To Advance Again.
More good economic news as stocks turned higher on Wednesday morning. After a shaky start, stocks managed to turn higher, led by by strength in technology and financials.
As expected Wells Fargo did very well during the first quarter. Wells Fargo had topped projections made earlier this month mainly do to the spike in mortgage refinancing. Wells Fargo posted a record first quarter profit of $3.05 billion. This enabled them to displace Bank of America Corp. as the nation's largest home builder.
Other good news on Wednesday was from Apple. The computer and consumer electronics maker beat analysts' profit and sales estimates. The Surging iPhone sales offset weakness in Mac Sales.
Good news to look forward to on Thursday includes: Microsoft will report results after the close. Software leader Microsoft is expected to report a profit of 39 cents per share versus 47 cents a year ago. Also after closing, Amazon.com (AMZN) is expected to report earnings. Other companies reporting results on Thursday: UPS (UPS), PepsiCo (PEP), Raytheon (RTN), and Amgen (AMGN).
As expected Wells Fargo did very well during the first quarter. Wells Fargo had topped projections made earlier this month mainly do to the spike in mortgage refinancing. Wells Fargo posted a record first quarter profit of $3.05 billion. This enabled them to displace Bank of America Corp. as the nation's largest home builder.
Other good news on Wednesday was from Apple. The computer and consumer electronics maker beat analysts' profit and sales estimates. The Surging iPhone sales offset weakness in Mac Sales.
Good news to look forward to on Thursday includes: Microsoft will report results after the close. Software leader Microsoft is expected to report a profit of 39 cents per share versus 47 cents a year ago. Also after closing, Amazon.com (AMZN) is expected to report earnings. Other companies reporting results on Thursday: UPS (UPS), PepsiCo (PEP), Raytheon (RTN), and Amgen (AMGN).
Wednesday, April 22, 2009
Freddie Mac CFO David Kellerman Hangs Himself
Unfortunately, the economic down turn has caused another apparent suicide. David Kellerman, a 16 year veteran of mortgage finance giant Freddie Mac, was named acting chief financial officer in September. Kellerman was found dead Wednesday morning, police said.
Lucy Caldwell, a spokeswoman for police in Fairfax County, VA. said the death "may have been an apparent suicide.
Authorities say there are no signs of foul play.
People do not hesitate to get help if you are contemplating suicide in any way. Please call the National Suicide Prevention Lifeline at 1-800-273-TALK (8255) to talk to a counselor if you need help. Things are going to get better. They always do. Remember: "This has all happened before and it will happen again," but we always get through it.
Lucy Caldwell, a spokeswoman for police in Fairfax County, VA. said the death "may have been an apparent suicide.
Authorities say there are no signs of foul play.
People do not hesitate to get help if you are contemplating suicide in any way. Please call the National Suicide Prevention Lifeline at 1-800-273-TALK (8255) to talk to a counselor if you need help. Things are going to get better. They always do. Remember: "This has all happened before and it will happen again," but we always get through it.
Financial Motivational Quote April 22, 2009
"A successful man is one who can lay a firm foundation with the bricks others have thrown at him."- David Brinkley
Tuesday, April 21, 2009
What Do I Need To Do To Have A 720 FICO Credit Score
If you don't already have a 720 FICO credit score you are going to need to change your financial life.
The Fair Isaac, which is where the FICO credit score name is derived from, compiles three scores from the major credit bureaus: Equifax, Experian, and Transunion. Your FICO credit score actually can range from 350 to 850(the highest credit score I have seen was 825). If you can get I FICO credit score over 800, you are as good as gold. Especially today the higher the better. I have seen mortgage lenders reserving better rates for consumers with a FICO credit score of 760 or better. But if you are not ready to buy a home in prime time housing market, don't sweat it. Just concentrate at getting your score to 720. Most creditors will be willing to extend you credit.
Here is what you need to do to get that score up:
- Always pay your bills on Time. This portion accounts for 35% of your FICO credit score. If you end late on your bills. This means not only your credit card payments, but loans of any kind. Your FICO credit score will go down. Just paying at least the minimum will help your score.
- Pay down what your debt. How much you owe compared to your available credit accounts for 30% of your FICO credit score.We have discussed this before. The less you owe on your credit cards the better you look to credit card companies and other lenders.
-Keep credit cards that have a long credit history. This accounts for 15% of your FICO credit score. The longer you have your credit cards, the more data FICO has to determine your credit risk. Don't cancel your credit cards. Even if they are paid off.
-Limit your applying for credit. New credit accounts for 10% of your FICO credit score. The more you apply for credit the more nervous you make lenders. If you apply for multiple forms of credit at the same time, it will bring down your credit score.
- Have different types of credit. This accounts for 10% of your FICO credit score. Lenders like to see a few different types of credit. It shows them you are able to handle different scenarios with debt. So having a credit card and a car loan is actually better than having just credit cards.
The Fair Isaac, which is where the FICO credit score name is derived from, compiles three scores from the major credit bureaus: Equifax, Experian, and Transunion. Your FICO credit score actually can range from 350 to 850(the highest credit score I have seen was 825). If you can get I FICO credit score over 800, you are as good as gold. Especially today the higher the better. I have seen mortgage lenders reserving better rates for consumers with a FICO credit score of 760 or better. But if you are not ready to buy a home in prime time housing market, don't sweat it. Just concentrate at getting your score to 720. Most creditors will be willing to extend you credit.
Here is what you need to do to get that score up:
- Always pay your bills on Time. This portion accounts for 35% of your FICO credit score. If you end late on your bills. This means not only your credit card payments, but loans of any kind. Your FICO credit score will go down. Just paying at least the minimum will help your score.
- Pay down what your debt. How much you owe compared to your available credit accounts for 30% of your FICO credit score.We have discussed this before. The less you owe on your credit cards the better you look to credit card companies and other lenders.
-Keep credit cards that have a long credit history. This accounts for 15% of your FICO credit score. The longer you have your credit cards, the more data FICO has to determine your credit risk. Don't cancel your credit cards. Even if they are paid off.
-Limit your applying for credit. New credit accounts for 10% of your FICO credit score. The more you apply for credit the more nervous you make lenders. If you apply for multiple forms of credit at the same time, it will bring down your credit score.
- Have different types of credit. This accounts for 10% of your FICO credit score. Lenders like to see a few different types of credit. It shows them you are able to handle different scenarios with debt. So having a credit card and a car loan is actually better than having just credit cards.
Obama To Get Behind The Credit Card Smackdown
We have continued to cover the pending credit card company smackdown. The new rules, if they go into effect, will prohibit banks from raising the interest rates on pre-existing credit card balances unless a payment is over 30 days past due.
Rep. Carolyn Maloney told her story for the fight against credit card companies. "From the floors of Congress to the people in my district, everyone has a credit card horror story," says Maloney. Such stories helped make this New York Democrat the sworn enemy of arbitrary interest rate hikes, excessive fees, misleading terms, and other shenanigans.
Now President Obama will be attending a meeting of administration officials and credit card company executives. President Obama is expected to press CEOs to adopt practices designed to protect credit card holders.
Stay tuned as legislation continues to get pushed through before the originally passed July 2010 deadline.
Rep. Carolyn Maloney told her story for the fight against credit card companies. "From the floors of Congress to the people in my district, everyone has a credit card horror story," says Maloney. Such stories helped make this New York Democrat the sworn enemy of arbitrary interest rate hikes, excessive fees, misleading terms, and other shenanigans.
Now President Obama will be attending a meeting of administration officials and credit card company executives. President Obama is expected to press CEOs to adopt practices designed to protect credit card holders.
Stay tuned as legislation continues to get pushed through before the originally passed July 2010 deadline.
Good News On Wall Street Continues This Week.
As hoped this week continues to deliver good economic news. Although Bank of America reported a first quarter profit of $4.2 billion the stock took a dive on the news that "deteriorating credit quality" would continue. But today was a new day.
Wall street managed to stage a come back late in the session. Tuesday stocks rebounded after yesterdays worries about the corporate results this week, but those were dissipated by renewed hopes that the financial sector is getting closer to stabilize. Tomorrow we will hear more about Wells Fargo's $3 billion profit.
Other good news today continues as Yahoo's new CEO Carol Bartz revealed how cost management will drive revenue in 2009. It also reported a first quarter profit that fell from last year at this time, but still managed to beat Wall Street's estimate.
Tomorrow we will hear financial firm Morgan Stanley (MS), which is expected to report before the bell.Other companies reporting in morning are: AT&T (T), Boeing (BA), and McDonald's (MCD). Apple will release results after closing.
Let's keep that good economic news coming. Remember: good news=good economy.
Wall street managed to stage a come back late in the session. Tuesday stocks rebounded after yesterdays worries about the corporate results this week, but those were dissipated by renewed hopes that the financial sector is getting closer to stabilize. Tomorrow we will hear more about Wells Fargo's $3 billion profit.
Other good news today continues as Yahoo's new CEO Carol Bartz revealed how cost management will drive revenue in 2009. It also reported a first quarter profit that fell from last year at this time, but still managed to beat Wall Street's estimate.
Tomorrow we will hear financial firm Morgan Stanley (MS), which is expected to report before the bell.Other companies reporting in morning are: AT&T (T), Boeing (BA), and McDonald's (MCD). Apple will release results after closing.
Let's keep that good economic news coming. Remember: good news=good economy.
Financial Motivational Quote April 21, 2009
"Somehow I can't believe there are many heights that can't be sealed by a man who knows the secret of making dreams come true. This special secret can be summarized in four C's. They are: curiosity, confidence, courage, and constancy, and the greatest of these is confidence."- Walt Disney
Monday, April 20, 2009
Collection Agencies Keep Calling Me About My Credit Card Debt. Should I Pay Them?
First of all don't pay anyone without verifying who they are or what the debt is. Debt collection agencies will call you if you have debts to pay. Debt Collection Agencies will also pursue old debts that you never paid off, in hopes that you will pay it just to get them to stop calling and harassing you. But beware! With the economy the way it is there are plenty of scams these days. Most of the time the debts don't exist. They are the result of identity theft, clerical errors, or credit reports that have not been updated. Other debts are so old the debt collection agency no longer has the right to legally sue to collect. I have seen court orders sent to people just before the legal time period is about to pass in hopes of being able to collect. I have also seen debts sold to other collection agencies in an attempt to extend the legal time period. Starting the clock all over. Within 30 days of being contacted by them, be sure to send the debt collection agency a letter explaining you do not owe this money and request proof that the debt is legit. Make sure the letter is certified and have them send you a copy of the bill to prove that it is true. If within 30 days the debt collection agency does not provide proof of the debt, they can longer keep contacting you. Also, they cannot list the debt on your credit report. You should always review your credit report at least once a year. Visit annualcreditreport.com to get a copy of your free credit report. All of the three credit bureaus, Equifax, Experian, and Transunion, are required to provide you with one free credit report a year.
Bank of America Gives Back To The Shareholders And The Community
As predicted another bank makes a profit for the first quarter of the year. Well ahead of expectations, Bank of America surprised Wall Street on Monday, reporting a whopping $4.2 billion. Passing up Wells Fargo's expected $3 billion. Financial Elite thought this would cause another surge in the market but, Bank of America's, as well as other stocks fell sharply in early morning trading as Bank of America warned of "deteriorating credit quality." Deteriorating credit quality should be a built in expectation as things are improving but, we are not out of the woods yet.
On a continued positive note Bank of America said it earned 44 cents during the quarter. A year ago, the bank reported a profit of $1.21 billion, of 23 cents a share.
Although, Bank of America's profits are not quite giving back to shareholders yet, Bank of America's associates are.
During Global Service Month in April, Bank of America associates will participate in environmental volunteer activities related to Earth Day, an internationally recognized event that promotes the importance of protecting the global environment. Earth Day is an opportunity to reinforce Bank of America's $2o billion, 10 year environmental initiative to address global climate change through lending, investing,, new products and services, operations, as well as philanthropic and volunteer support.
"Bank of America's commitment to strengthen the economic and social well-being of the community stems from the recognition that the success of our business is intrinsically linked with the health of the individuals and families we serve," said Andrew Piepier, Global Community impact executive. "As part of Bank of America's Global Service Month, associates have an opportunity to play an important role in improving neighborhoods through volunteerism aligned with the bank's environmental commitment."
Officially celebrated on April 22, Earth Day activities include raising awareness about climate change, helping to build environmentally sustainable housing, planting trees or flowers, and picking up trash from public spaces. Additional bank wide Global Service Month activities include hunger relief projects through a partnership with feeding America, financial education in conjunction with Teach Children to Save Day, and affordable housing in partnership with Habitat for Humanity.
On a continued positive note Bank of America said it earned 44 cents during the quarter. A year ago, the bank reported a profit of $1.21 billion, of 23 cents a share.
Although, Bank of America's profits are not quite giving back to shareholders yet, Bank of America's associates are.
During Global Service Month in April, Bank of America associates will participate in environmental volunteer activities related to Earth Day, an internationally recognized event that promotes the importance of protecting the global environment. Earth Day is an opportunity to reinforce Bank of America's $2o billion, 10 year environmental initiative to address global climate change through lending, investing,, new products and services, operations, as well as philanthropic and volunteer support.
"Bank of America's commitment to strengthen the economic and social well-being of the community stems from the recognition that the success of our business is intrinsically linked with the health of the individuals and families we serve," said Andrew Piepier, Global Community impact executive. "As part of Bank of America's Global Service Month, associates have an opportunity to play an important role in improving neighborhoods through volunteerism aligned with the bank's environmental commitment."
Officially celebrated on April 22, Earth Day activities include raising awareness about climate change, helping to build environmentally sustainable housing, planting trees or flowers, and picking up trash from public spaces. Additional bank wide Global Service Month activities include hunger relief projects through a partnership with feeding America, financial education in conjunction with Teach Children to Save Day, and affordable housing in partnership with Habitat for Humanity.
Sunday, April 19, 2009
Looking Forward To More Good News This Week
Last weeks had good news in the banking sector from Wells Fargo and JPMorgan with there 1st quarter surprise profits.
Other good news came with the announcement that the Obama administrations loan modification program is finally underway.
On Wednesday the Treasury Department announced the first six participants to sign up for President Obama's plan. The participants include JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.
A spokesman said addtional loan servicers will be added to the list over time.
"We view this modification program as yet another incremental opportunity for thousands of homeowners to preserve and maintain the dream of homeownership," Wells Fargo said in a statement.
Here was what we can look forward to this week:
On Monday: Bank of America will report quarterly results before the opening bell.
After closing IBM is expected to report earnings of $1.66 per share, versus $1.65 a year ago.
Other reporting companies reporting Monday are: Eli Lilly (LLY), Halliburton (HAL), and Texas Instruments (TXN)
On Tuesday: Caterpillar (CAT), Coca-Cola (KO), Merck (MRK, and United Technologies (UTX) are all reporting results before the bell.
After the close Yahoo will report earning.
Other companies reporting include: Delta Air Lines (DAL), Lockheed Martin (LMT), Schering-Plough (SGP), and Advanced Micro Devices (AMD)
On Wednesday: Wells Fargo will officially report results before the bell. As we discussed last week that it will see a profit of $3 billion.
Financial firm Morgan Stanley (MS) is expected to report before the bell.
Other companies reporting in morning are: AT&T (T), Boeing (BA), and McDonald's (MCD).
Apple will release results after closing.
On Thursday: Microsoft will report results after the close. Software leader Microsoft is expected to report a profit of 39 cents per share versus 47 cents a year ago.
Also after closing, Amazon.com (AMZN) is expected to report earnings.
Other companies reporting results on Thursday: UPS (UPS), PepsiCo (PEP), Raytheon (RTN), and Amgen (AMGN).
On Friday: 3M (MMM) will report results before the bell.
Other companies reporting Friday include: Honeywell (HON), Schlumberger (SLB), and Xerox (XRX). The should be reporting in the morning as well.
There is sure to be some mixed results this week. I am keeping my fingers crossed for more good news. Remember good news=good economy.
Other good news came with the announcement that the Obama administrations loan modification program is finally underway.
On Wednesday the Treasury Department announced the first six participants to sign up for President Obama's plan. The participants include JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.
A spokesman said addtional loan servicers will be added to the list over time.
"We view this modification program as yet another incremental opportunity for thousands of homeowners to preserve and maintain the dream of homeownership," Wells Fargo said in a statement.
Here was what we can look forward to this week:
On Monday: Bank of America will report quarterly results before the opening bell.
After closing IBM is expected to report earnings of $1.66 per share, versus $1.65 a year ago.
Other reporting companies reporting Monday are: Eli Lilly (LLY), Halliburton (HAL), and Texas Instruments (TXN)
On Tuesday: Caterpillar (CAT), Coca-Cola (KO), Merck (MRK, and United Technologies (UTX) are all reporting results before the bell.
After the close Yahoo will report earning.
Other companies reporting include: Delta Air Lines (DAL), Lockheed Martin (LMT), Schering-Plough (SGP), and Advanced Micro Devices (AMD)
On Wednesday: Wells Fargo will officially report results before the bell. As we discussed last week that it will see a profit of $3 billion.
Financial firm Morgan Stanley (MS) is expected to report before the bell.
Other companies reporting in morning are: AT&T (T), Boeing (BA), and McDonald's (MCD).
Apple will release results after closing.
On Thursday: Microsoft will report results after the close. Software leader Microsoft is expected to report a profit of 39 cents per share versus 47 cents a year ago.
Also after closing, Amazon.com (AMZN) is expected to report earnings.
Other companies reporting results on Thursday: UPS (UPS), PepsiCo (PEP), Raytheon (RTN), and Amgen (AMGN).
On Friday: 3M (MMM) will report results before the bell.
Other companies reporting Friday include: Honeywell (HON), Schlumberger (SLB), and Xerox (XRX). The should be reporting in the morning as well.
There is sure to be some mixed results this week. I am keeping my fingers crossed for more good news. Remember good news=good economy.
Should I Use My HELOC To Pay Off My Credit Card Debt?
Even if you still have equity or your HELOC credit line has not been reduced or closed you probably shouldn't do this right now. You could be putting your home in serious risk.
One good thing with using your HELOC to pay off your credit card debt is the interest
now becomes tax deductible. But I still don't like the equity in your home being used for liabilities rather than creating assets. Like buying a rental property or starting a business. But with the economy just starting to turn around I wouldn't mess with using my home as collateral at the moment.
There is a chance you may lose your job the way the economy has been struggling. So what if you can't keep up with your HELOC payments along with all your debts? Your unemployment checks probably are not going to cut it. If you fall behind on your HELOC payments you could lose your house.
I love that you want to pay off your credit card debt but, I want you to understand that credit card debt is unsecured debt. Your HELOC is secured debt. The credit card company has no collateral to force you to hand over to settle your credit card debt. It is not a good idea to transfer your unsecured credit card debt to secured debt. Using your HELOC to pay off credit card debt only puts your home at risk if you can't make the payments.
One good thing with using your HELOC to pay off your credit card debt is the interest
now becomes tax deductible. But I still don't like the equity in your home being used for liabilities rather than creating assets. Like buying a rental property or starting a business. But with the economy just starting to turn around I wouldn't mess with using my home as collateral at the moment.
There is a chance you may lose your job the way the economy has been struggling. So what if you can't keep up with your HELOC payments along with all your debts? Your unemployment checks probably are not going to cut it. If you fall behind on your HELOC payments you could lose your house.
I love that you want to pay off your credit card debt but, I want you to understand that credit card debt is unsecured debt. Your HELOC is secured debt. The credit card company has no collateral to force you to hand over to settle your credit card debt. It is not a good idea to transfer your unsecured credit card debt to secured debt. Using your HELOC to pay off credit card debt only puts your home at risk if you can't make the payments.
Bank of America Film Recognized For Excellence In Filmmaking
Our haven't had all that good of press last year but, things are beginning to turn around. One good thing I can say is Bank of America is always giving back to the community.
Bank of America's Global Diversity & Inclusion Film, produced in 2008, has been honored in two prestigious film competitions.
The film earned a prestigious 2009 Finalist Certificate from the New York Film Festival in the Industrial Productions-Public Relations category. In a field of 700 entrants--including Fortune 500 corporations, Universal Studios, HBO and Showtime--fewer than 20 were recognized with the award.
The film was also honored with a local Charlotte ADDY Award, receiving silver-level recognition for both audio/visual sales presentation and cinematography. With more than 60,000 entries annually, the ADDY Awards is considered the world's largest and most competitive advertising competition. The American Advertising Federation, a not for profit industry association, conducts the ADDY Awards through its 200 member advertising clubs and15 districts. It is only creative awards program administered by the advertising industry for the industry.
The Global Diversity & Inclusion Film debuted in 2008 as the hallmark of a campaign to raise awareness of the bank's commitment to diversity and inclusion. It documents Bank of America's long history of diversity and inclusion and showcases its work in recruiting diverse talent, doing business with diverse suppliers, charitable giving in diverse communities and providing innovative products and services to customers and clients. Nearly 200 Bank of America associates across the lines of business participated in the production of the film.
For more information about the awards, visit the New York Film Festival Web Site and the American Advertising Federation's Charlotte affiliate Web Site.
Bank of America's Global Diversity & Inclusion Film, produced in 2008, has been honored in two prestigious film competitions.
The film earned a prestigious 2009 Finalist Certificate from the New York Film Festival in the Industrial Productions-Public Relations category. In a field of 700 entrants--including Fortune 500 corporations, Universal Studios, HBO and Showtime--fewer than 20 were recognized with the award.
The film was also honored with a local Charlotte ADDY Award, receiving silver-level recognition for both audio/visual sales presentation and cinematography. With more than 60,000 entries annually, the ADDY Awards is considered the world's largest and most competitive advertising competition. The American Advertising Federation, a not for profit industry association, conducts the ADDY Awards through its 200 member advertising clubs and15 districts. It is only creative awards program administered by the advertising industry for the industry.
The Global Diversity & Inclusion Film debuted in 2008 as the hallmark of a campaign to raise awareness of the bank's commitment to diversity and inclusion. It documents Bank of America's long history of diversity and inclusion and showcases its work in recruiting diverse talent, doing business with diverse suppliers, charitable giving in diverse communities and providing innovative products and services to customers and clients. Nearly 200 Bank of America associates across the lines of business participated in the production of the film.
For more information about the awards, visit the New York Film Festival Web Site and the American Advertising Federation's Charlotte affiliate Web Site.
I Have A Great Credit Score. Why Am I Getting Declined For Loans?
What do mean by great credit score? Unless you have a FICO credit score of at least 720 you can just about forget getting approved any kind of credit. It's the only way to get any kind of credit with decent terms.
Banks, lenders, and credit card companies aren't just handing out money like they used to. That goes for any kind of credit: credit cards, mortgages, car loans, student loans, etc. Back in the day of irresponsible lending it fairly easy fro anyone to get credit. But those days are gone. Probably forever or at least in our lifetime. In the past if you had a FICO credit score of 720 you would get a loan with decent terms and no questions asked. if you had a FICO credit score below 720 you could probably still get a loan or credit card but, probably would pay a higher interest rate or more fees. Today a FICO credit score below 720 can mean no loan, no way. Lenders today are being very cautious to who they lend money to. If you have a FICO credit score below 700 it is very difficult to get a loan right now. If you do qualify for a loan you will probably be looking at paying a higher rate of interest and higher fees than you would have just a couple of years ago. So when you say you have a great credit score it needs to be 700 or more. The days of a FICO credit score in the 600 range being considered great credit are gone.
Banks, lenders, and credit card companies aren't just handing out money like they used to. That goes for any kind of credit: credit cards, mortgages, car loans, student loans, etc. Back in the day of irresponsible lending it fairly easy fro anyone to get credit. But those days are gone. Probably forever or at least in our lifetime. In the past if you had a FICO credit score of 720 you would get a loan with decent terms and no questions asked. if you had a FICO credit score below 720 you could probably still get a loan or credit card but, probably would pay a higher interest rate or more fees. Today a FICO credit score below 720 can mean no loan, no way. Lenders today are being very cautious to who they lend money to. If you have a FICO credit score below 700 it is very difficult to get a loan right now. If you do qualify for a loan you will probably be looking at paying a higher rate of interest and higher fees than you would have just a couple of years ago. So when you say you have a great credit score it needs to be 700 or more. The days of a FICO credit score in the 600 range being considered great credit are gone.
Two Things Are Certain In Life...Death and Taxes.
Having to pay taxes sucks but, we all have to do it. Even the Preisdent and Vice-President.
Recently the tax returns of President Obama and Vice President Biden were released to the public. Everybody has been eager to see the incomes of our two leaders.
An article from Reuters revealed President Obama, filing joint with Michelle Obama, had an adjusted gross income of $2,656,902. They paid roughly $855,000 in federal income taxes and almost $78,000 in state income taxes.
Most people are thinking or asking, do President's of the United States make that much money? But remember President Obama is a best selling author. The majority of President Obama's income came from the sale of his memoirs, "Dreams of My Father" and "The Audacity of Hope."
In Vice President Biden's case he made a tenth of what the President did. Both the Vice President and his wife claimed $269,256 for 2008.
You can take a look at both President Obama and Vice President Biden's tax returns. Both are open to the public. Wouldn't it be interesting if everyone's taxes were open to the public.
Financial Motivational Quote April 19, 2009
"Every advantage in the past is judged in the light of the final issue."- Demosthenes
Saturday, April 18, 2009
Should I Take Out A 401K Loan To Pay Off My Credit Cards?
I have taken out 401k loans before but, I have taken them out to use as down payments for buying homes. All in all no matter what you take the 401k out for the concept is the same.
Unless you are not able to make your credit card payments at all and your FICO credit score is in jeopardy, this might not be a good idea right now. Be aware you can end up paying taxes twice on the money you borrow. If your FICO credit score has already gone bad due to late payments and your interest rate has sky rocketed to 30%,a 401K loan might be looking pretty good and you might think the tax penalty may be worth it.
The problem is we are in the middle of a recession. There is a possibility that you may loose your job. I have friends who have been with their company for years, In some cases over fifteen years, who have lost their job. No matter how much seniority you have you can still get laid off without any warning. If you were to be laid off and you have an outstanding 401k loan, you will have to repay the loan within a short period of time. Typically the time frame is 90 days. If you don't pay it off within that time frame your 401K loan will become a 401K withdrawal. This means you will have to pay tax on the entire amount. On top of that you will have a 10% early withdrawal penalty if you are under 55 when your service ends. Would you be able to pay back the 401K loan if that were to happen? You certainly wouldn't be able to take it from a credit card would you?
Something else to consider is your retirement. If you no longer have a your 401K, what else do you have for retirement? If retirement isn't on your mind it needs to be. If you can't pay your credit cards you may be thinking of bankruptcy. There are other options before things go that far, but the good thing with bankruptcy is(if there such a thing when it comes to bankruptcy)the money in your 401K or IRA is protected under bankruptcy law. You will not be required to payoff your credit card debts with your retirement savings. Don't blow your retirement on paying off your credit card debt.
Unless you are not able to make your credit card payments at all and your FICO credit score is in jeopardy, this might not be a good idea right now. Be aware you can end up paying taxes twice on the money you borrow. If your FICO credit score has already gone bad due to late payments and your interest rate has sky rocketed to 30%,a 401K loan might be looking pretty good and you might think the tax penalty may be worth it.
The problem is we are in the middle of a recession. There is a possibility that you may loose your job. I have friends who have been with their company for years, In some cases over fifteen years, who have lost their job. No matter how much seniority you have you can still get laid off without any warning. If you were to be laid off and you have an outstanding 401k loan, you will have to repay the loan within a short period of time. Typically the time frame is 90 days. If you don't pay it off within that time frame your 401K loan will become a 401K withdrawal. This means you will have to pay tax on the entire amount. On top of that you will have a 10% early withdrawal penalty if you are under 55 when your service ends. Would you be able to pay back the 401K loan if that were to happen? You certainly wouldn't be able to take it from a credit card would you?
Something else to consider is your retirement. If you no longer have a your 401K, what else do you have for retirement? If retirement isn't on your mind it needs to be. If you can't pay your credit cards you may be thinking of bankruptcy. There are other options before things go that far, but the good thing with bankruptcy is(if there such a thing when it comes to bankruptcy)the money in your 401K or IRA is protected under bankruptcy law. You will not be required to payoff your credit card debts with your retirement savings. Don't blow your retirement on paying off your credit card debt.
Everyone Has a Credit Card Horror Story
We have continued to post status on the bills that are going to be a smackdown on credit cards. Now we get to meet you "the best friend a credit card user ever had," Rep. Carolyn Maloney.
Donna Rosato, money Magazine senior writer, wrote this story for money Magazine and I thought it was great to see the person who has become a sworn enemy of card issuer shenanigans.
(Money Magazine)-- "From the floors of Congress to the people in my district, everyone has a credit card horror story," says Rep. Carolyn Maloney. Such stories helped make this New York Democrat the sworn enemy of arbitrary interest rate hikes, excessive fees, misleading terms, and other shenanigans.
Thanks to Maloney's efforts (she introduced a Credit Cardholders' Bill of Rights in 2008), the Fed passed new regulations last year banning card issuers' most egregious practices.
But the new rules don't take effect until July 2010- so she has introduced a bill that would require them to kick in much faster, plus limit other damaging moves, such as target minors.
With the support of heavy hitters like Rep. Barney rank, the bill has a good chance of passing. (It will probably come up for a vote this spring.) "There's tremendous momentum for making these changes now," Maloney says.
Don't doubt her. After all, she's the reason ATMs have to warn you before charging a fee (she wrote that law in 1999). Next up: legislation requiring you to be notified when a purchase with a debit or ATM card would trigger an overdraft fee.
It is going to be very interest to see if this new bill speeds up the process and get rolling before 2010. Even if it does I speculate credit card companies will kick into high gear to stick it credit cardholders as much as they can before things go into effect.
Do you have a credit card horror story? Let's hear from you.
Donna Rosato, money Magazine senior writer, wrote this story for money Magazine and I thought it was great to see the person who has become a sworn enemy of card issuer shenanigans.
(Money Magazine)-- "From the floors of Congress to the people in my district, everyone has a credit card horror story," says Rep. Carolyn Maloney. Such stories helped make this New York Democrat the sworn enemy of arbitrary interest rate hikes, excessive fees, misleading terms, and other shenanigans.
Thanks to Maloney's efforts (she introduced a Credit Cardholders' Bill of Rights in 2008), the Fed passed new regulations last year banning card issuers' most egregious practices.
But the new rules don't take effect until July 2010- so she has introduced a bill that would require them to kick in much faster, plus limit other damaging moves, such as target minors.
With the support of heavy hitters like Rep. Barney rank, the bill has a good chance of passing. (It will probably come up for a vote this spring.) "There's tremendous momentum for making these changes now," Maloney says.
Don't doubt her. After all, she's the reason ATMs have to warn you before charging a fee (she wrote that law in 1999). Next up: legislation requiring you to be notified when a purchase with a debit or ATM card would trigger an overdraft fee.
It is going to be very interest to see if this new bill speeds up the process and get rolling before 2010. Even if it does I speculate credit card companies will kick into high gear to stick it credit cardholders as much as they can before things go into effect.
Do you have a credit card horror story? Let's hear from you.
Thursday, April 16, 2009
Another Great Week Of Economic Good News
If you thought last weeks economic good news was great with President Obama's "Glimmers of Hope" speech, check out the phenomenal week of great economic news.
CNNMoney.com reported a slew of good economic news this week:
-Federal Reserve chief Ben Bernake said Tuesday he sees "tentative signs" that the economy's dramatic decline is easing. "Recently we have seen tentative signs that the the sharp decline in economic activity may be slowing."
-Reuters reports the Beige Book notes several of the 12 districts saw activity in some sectors is stabilizing--at a low, level, while the labor market remains weak. Five of the 12 districts noted a moderation in the pace of decline, and several saw signs that activity in some sectors was stabilizing at a low level. "Manufacturing activity weakened across a broad range of industries in most districts, with only a few exceptions." according to the Fed's Beige Book summary of anecdotal reports from its 12 regional banks.
- Homebuilder confidence jumps. Signs of recovery-and perhaps a bottom-emerge in housing market report; largest monthly increase since 2003. In a strong sign that the housing market may be picking up, builder confidence in April made its most dramatic increase in nearly seven years, according to an industry report. "After a very long period of extreme distress, it's given the builders some sense of reaching a bottom," said David Crowe, chief economist for the association.
-Shares of Google Inc. rose Thursday after the Internet search company said is first quarter profit climbed 8.9% and topped Wall Street's forecast, amid a tough advertising environment.
-Initial jobless claims plunged to 610,000 in the week ended April 11, reported the U.S. Department of Labor. That's a decline of 53,000 from the prior week, which the government revised to 663,000.
-The April Philadelphia Fed index improved to a decline of negative 24.4 from negative 35.0 versus forecasts for a reading of negative 32.
-If you think Wells Fargo $3 billion profit was great, JPMorgan Chase is a close second. JPMorgan Chase reported a better than expected profit of $2.1 billion in the latest quarter, even as the bank aggressively set aside money to cope with rising loan losses, the company said Thursday.
-Wall street recharged the advance Thursday, with the major gauges touching multi month highs on JPMorgan Chase's better than expected results and anticipation about Google's profit report. The NASDAQ composite (COMP) added 44 points, or 2.7% according to early tallies, ending at a five month high.
This is the kind of news we need to hear from now on. As long as this continues to dominate the headlines the economy will get better. I am confident this will become a regular occurrence and Financial Elite will be there to tell you about it.
CNNMoney.com reported a slew of good economic news this week:
-Federal Reserve chief Ben Bernake said Tuesday he sees "tentative signs" that the economy's dramatic decline is easing. "Recently we have seen tentative signs that the the sharp decline in economic activity may be slowing."
-Reuters reports the Beige Book notes several of the 12 districts saw activity in some sectors is stabilizing--at a low, level, while the labor market remains weak. Five of the 12 districts noted a moderation in the pace of decline, and several saw signs that activity in some sectors was stabilizing at a low level. "Manufacturing activity weakened across a broad range of industries in most districts, with only a few exceptions." according to the Fed's Beige Book summary of anecdotal reports from its 12 regional banks.
- Homebuilder confidence jumps. Signs of recovery-and perhaps a bottom-emerge in housing market report; largest monthly increase since 2003. In a strong sign that the housing market may be picking up, builder confidence in April made its most dramatic increase in nearly seven years, according to an industry report. "After a very long period of extreme distress, it's given the builders some sense of reaching a bottom," said David Crowe, chief economist for the association.
-Shares of Google Inc. rose Thursday after the Internet search company said is first quarter profit climbed 8.9% and topped Wall Street's forecast, amid a tough advertising environment.
-Initial jobless claims plunged to 610,000 in the week ended April 11, reported the U.S. Department of Labor. That's a decline of 53,000 from the prior week, which the government revised to 663,000.
-The April Philadelphia Fed index improved to a decline of negative 24.4 from negative 35.0 versus forecasts for a reading of negative 32.
-If you think Wells Fargo $3 billion profit was great, JPMorgan Chase is a close second. JPMorgan Chase reported a better than expected profit of $2.1 billion in the latest quarter, even as the bank aggressively set aside money to cope with rising loan losses, the company said Thursday.
-Wall street recharged the advance Thursday, with the major gauges touching multi month highs on JPMorgan Chase's better than expected results and anticipation about Google's profit report. The NASDAQ composite (COMP) added 44 points, or 2.7% according to early tallies, ending at a five month high.
This is the kind of news we need to hear from now on. As long as this continues to dominate the headlines the economy will get better. I am confident this will become a regular occurrence and Financial Elite will be there to tell you about it.
I have A Low FICO Credit Score. I am Current On All My Credit Cards But, How Do I Keep My FICO Credit Score From Falling Further?
As we have discussed many times before, here is what you need to do:
-Always pay at least the minimum amount due on every credit card every month. That is the best way from keeping your FICO credit score from falling any further. It will also help keep your credit card company from closing your account or lowering your limit.
- Put all of your credit cards in order according to the highest interest rate. Start with the credit card with the highest interest rate and concentrate on paying off that one first. Pay as much as you possibly can each month to get that credit card paid off.
- Once that credit card is paid off, move on to the the next credit card, the one with the next highest interest rate. Start applying the payment you were making towards the first card and add it the minimum payment you were previously paying on the second credit card.
- Keep repeating this process until all of your credit cards were paid off.
Wednesday, April 15, 2009
What's The Best Way To Pay Off My Credit Card Debt If I Have A High FICO Credit Score?
Credit card companies may not be exactly handing out credit cards now a days like they used to, but doing balance transfers may be your best bet. Transferring to a low rate credit card may still be possible since you have a good FICO credit score. And when we say "good credit score" we mean 720 or more. That's about what it takes today to get approved for a descent interest rate or get approved for anything as it is.
A good place to shop for balance transfer offers is Cardtrack.com. When moving your balances from a higher interest rate credit card to one with a lower interest rate you need to hustle and take advantage of the lower rate. You need to pay as much as you can and get that balance down before the low rate expires. Even though you obtain a lower interest rate credit card you are still at the mercy of the tricky credit card companies. If you make one mistake like: go over your limit, make a payment late, or don't pay down your balance you can see your low interest rate sky rocket to a higher one. You can even see your limit reduced and cause your debt to available credit ratio to increase and cause your FICO credit score to go down.
A good place to shop for balance transfer offers is Cardtrack.com. When moving your balances from a higher interest rate credit card to one with a lower interest rate you need to hustle and take advantage of the lower rate. You need to pay as much as you can and get that balance down before the low rate expires. Even though you obtain a lower interest rate credit card you are still at the mercy of the tricky credit card companies. If you make one mistake like: go over your limit, make a payment late, or don't pay down your balance you can see your low interest rate sky rocket to a higher one. You can even see your limit reduced and cause your debt to available credit ratio to increase and cause your FICO credit score to go down.
Financial Motivational Quote April 15, 2009
"History records the successes of men with objectives and a sense of direction. Obilivion is the position of small men overwhelmed by obstacles."- William Danforth
Tuesday, April 14, 2009
If My Bank Fails Do I Still Have To Pay Back My Credit Card?
Hello? I don't intend to be mean but, yes, you have to pay back your credit card. Even if the credit card company or the bank where you have your credit card or credit cards fails you are still responsible for the debt. This goes for loans too. As we have discussed before there is no easy way out. You have a personal responsibility to pay these debts. You made these charges and you must pay the debt you created.
Keep making your payments like normal. I recommend keeping a copy of the payments you make either by check or electronically, and put it in safe place where you can find it if needed. The new bank or credit card company that picks up your account should begin billing you normally, but you never know. You should keep records of payments for at least six months after your bank is taken over by another bank. Things happen during mergers or transfers of accounts to other banks or credit card companies. If for some reason there is a delay in billing don't think you are off the hook. The bank or credit card company will eventually discover the error and get you caught up. Don't miss payments. This will effect your FICO credit score.
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