Talk of bankruptcy has reared its ugly head again today between my wife and I. We have been doing so well over the past year and have paid off almost $30,000 of our debt so far.
All of our bills are paid on time, with the exception of our primary mortgage and our business accounts. We have been working on a loan modification for our primary mortgage and the business accounts are looking like they will be going to court. We refuse to let our house go and will ultimately default on all our other accounts if need be to prevent from losing our house. As for the business accounts, any judgement will put us over the edge and either circumstance may require us to file bankruptcy.
We did look into bankruptcy last year, but decided against it because we wanted to do the right thing. We borrowed against the cards, we took the mortgages out for our homes, we owe the money. But, why not just file bankruptcy?
Bankruptcy should only be used as last resort. Bankruptcy will ruin your credit for 10 years. Not that our credit isn't in rocky shape right now, but if we can get these last couple of things worked out it will improve quickly. In today's economy it will be highly unlikely to get any type of credit. Not that we have interest in getting any right now, but in the end it all comes down to repaying what we owe and keeping our character intact.
[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).] Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
Showing posts with label credit card debt. Show all posts
Showing posts with label credit card debt. Show all posts
Monday, February 14, 2011
Tuesday, February 8, 2011
If You Think 29.9% is Bad, Try 79.9%
From Blake Ellis at CNNMoney.com: My credit card had a 79.9% APR
Toni Riss had a credit card with a 79.9% interest rate.
"I had an accident on a motorcycle, went through bankruptcy to pay for medical expenses and my credit went to hell in a hand basket, so I was looking for credit cards for people with bad credit." Riss said.
"I about had a heart attack when I got a disclosure notice saying that my starting rate of 29.9% was going up to 79.9%," said Riss. "It was ludicrous. talk about a highway robbery."
[Yes], that rate is completely legal. The Card Act, which was passed in late 2009 to protect consumers from predatory lenders, only prevents issuers from raising rates retroactively. Credit card issuers are free to charge whatever rate they want at the front end.
I have thought of applying for a card with First Premier myself, but I have decided to stay with my no credit card policy. No matter what the limit or the interest rate. It's the best way to stay out of trouble.
Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
Toni Riss had a credit card with a 79.9% interest rate.
"I had an accident on a motorcycle, went through bankruptcy to pay for medical expenses and my credit went to hell in a hand basket, so I was looking for credit cards for people with bad credit." Riss said.
"I about had a heart attack when I got a disclosure notice saying that my starting rate of 29.9% was going up to 79.9%," said Riss. "It was ludicrous. talk about a highway robbery."
[Yes], that rate is completely legal. The Card Act, which was passed in late 2009 to protect consumers from predatory lenders, only prevents issuers from raising rates retroactively. Credit card issuers are free to charge whatever rate they want at the front end.
I have thought of applying for a card with First Premier myself, but I have decided to stay with my no credit card policy. No matter what the limit or the interest rate. It's the best way to stay out of trouble.
Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
Sunday, November 14, 2010
How to Determine Your Financial Goals: Both Short and Long Term
What are short terms goals? Short term goals can be anything you'd like save for or purchase. Anywhere from within the next month, this year, or maybe even the next two or three years. Next try to determine whether your goals are either something you "want" or something you "need". Dave Ramsey suggests asking yourself these three questions:
- "If we didn't purchase this item this year would it make a big difference to both of us?" If it doesn't, it slides over to the wants list.
- On the needs list, ask yourself, "If we could only purchase one of these items by saving for it this year, which one would we prioritize first?" Then, choose which would be the second and so on for both the needs list and wants list.
- "How much will each item cost?" Begin researching to what these particular items cost.
What are long term goals? Loan term goals are those that you plan on achieving in the next three years or longer. For instance, my wife and I started our plan earlier this year to be debt free in the next five years. Under normal circumstances we weren't able to pay off all of our credit cards in a few months or even year, but five years was a realistic goal. Just like short term goals ask yourself questions to determine your specific long term goals. Some of the questions you can ask yourself can cover:
- Paying off debt
- Savings
- Retirement
- Funding College for your children
- Automobile replacement
- Travel
- Pay off your home
- Starting a business
- Giving to Charity
- Paying for your child's/children's wedding
- Remodel your home
- Financial freedom
The list is endless, but you will never reach your goals if don't write them down, make a plan to execute them, and stick to them.
Let us hear from you. What are some of your long and short term goals?
[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]
Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
Wednesday, November 3, 2010
When it Rains, It Pours
Day 307 of my Financial Freedom Countdown.
The other day I discussed how the Lord giveth and the creditor taketh away, but unexpected expenses can take away as well.
We received a text from our renter this morning letting us know the hot water heater was out. My first impression was of water leaking everywhere and there being just a huge mess. Not only a mess, but I was also thinking there goes the budget this month and we are just not going to ever pay extra towards our credit card debt. However, things were not that bad after all.
I have never had a hot water heater go out, but everyone I know who has, had a major leak. In our case it wasn't a leak, but the pilot light just went out and wouldn't re-light. It did need a part replaced however. The good news is the water heater was still under warranty and all we had to pay was labor. The bad news was we had to pay $165.00 for the labor.
Lucky for us we have our $1,000 emergency fund in place. Not only an emergency fund personally, but an emergency fund for our investment property. If your water heater went out out, would you have the money to fix? If not, you can always take cold showers. Those feel real good with winter coming up. If you don't have your $1,000 emergency fund established, get on it.
[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]
Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
The other day I discussed how the Lord giveth and the creditor taketh away, but unexpected expenses can take away as well.
I have never had a hot water heater go out, but everyone I know who has, had a major leak. In our case it wasn't a leak, but the pilot light just went out and wouldn't re-light. It did need a part replaced however. The good news is the water heater was still under warranty and all we had to pay was labor. The bad news was we had to pay $165.00 for the labor.
Lucky for us we have our $1,000 emergency fund in place. Not only an emergency fund personally, but an emergency fund for our investment property. If your water heater went out out, would you have the money to fix? If not, you can always take cold showers. Those feel real good with winter coming up. If you don't have your $1,000 emergency fund established, get on it.
[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]
Did you enjoy reading this article? You can receive free full-text articles from Financial Elite by RSS in your email inbox daily by entering your email HERE. Your email will only be used for this daily subscription, and each email will include a link you may use to unsubscribe at any time. Also follow us on Twitter.
Wednesday, January 6, 2010
Financial Motivational Quote for Janaury 6, 2010
"I, however, place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be geared." ` Thomas Jefferson
For answers to all your financial questions check us out. Subscribe so you never miss the boat.
For answers to all your financial questions check us out. Subscribe so you never miss the boat.
Tuesday, May 26, 2009
Obama Makes The Credit Card Smackdown A Reality
Last Tuesday the Senate voted 90-5 to approve the bill that makes it tougher for credit card companies to raise fees and interest rates starting in the first quarter next year.
"To have the industry reaching and be as abusive to consumers, it needed to stop and it needed to change," said Senator Chris Dodd, a bill sponsor.
The bill targets credit card rate hikes and excessive fees."The President has created a strong impetus for immediate action, "said Travis Plunkett with the Consumer Federation of America.
President Obama signed the bill on Friday making it tougher for credit card companies to raise fees and interest rates.
The new law was a culmination of several years of work by consumers groups and Democrats to rein in what they say are abusive practices that prey on consumers. During the bill signing ceremony President Obama praised the new law.
Starting in February 2010 the bill will put a stop to:
- Charging consumers to pay by phone
- Sudden surges in interest rates
The bill also makes changes to:
- Applying payments made over the minimum due to balances with the highest interest rates first.
- Information in tiny print must be made clearer.
- Let consumers know how long it would take to payoff a balance if they only pay the minimum payment.
Credit card companies have been raising fees and interest rates. From November 2008 to February 2009, rates increased from an average of 12.02% to 13.08%. Because of this people have not been able to make their payments on their credit cards and are walking away from the debt.
President Obama stated the bill is not designed to protect those who are financially irresponsible, and that credit card companies do deserve to make a profit.
"We do not excuse those, and do not condone folks who have acted irresponsibly," he said.
Although, the bill is now law it doesn't go into effect until February 2010. Watch out for credit card companies trying to raise rates and charge as many fees as they can before the bill goes into effective.
President Obama Signs New Credit Card Bill Into Law
Everyone Has a Credit Card Horror Story
"To have the industry reaching and be as abusive to consumers, it needed to stop and it needed to change," said Senator Chris Dodd, a bill sponsor.
The bill targets credit card rate hikes and excessive fees."The President has created a strong impetus for immediate action, "said Travis Plunkett with the Consumer Federation of America.
President Obama signed the bill on Friday making it tougher for credit card companies to raise fees and interest rates.
The new law was a culmination of several years of work by consumers groups and Democrats to rein in what they say are abusive practices that prey on consumers. During the bill signing ceremony President Obama praised the new law.
Starting in February 2010 the bill will put a stop to:
- Charging consumers to pay by phone
- Sudden surges in interest rates
The bill also makes changes to:
- Applying payments made over the minimum due to balances with the highest interest rates first.
- Information in tiny print must be made clearer.
- Let consumers know how long it would take to payoff a balance if they only pay the minimum payment.
Credit card companies have been raising fees and interest rates. From November 2008 to February 2009, rates increased from an average of 12.02% to 13.08%. Because of this people have not been able to make their payments on their credit cards and are walking away from the debt.
President Obama stated the bill is not designed to protect those who are financially irresponsible, and that credit card companies do deserve to make a profit.
"We do not excuse those, and do not condone folks who have acted irresponsibly," he said.
Although, the bill is now law it doesn't go into effect until February 2010. Watch out for credit card companies trying to raise rates and charge as many fees as they can before the bill goes into effective.
President Obama Signs New Credit Card Bill Into Law
Everyone Has a Credit Card Horror Story
Sunday, May 24, 2009
President Obama Signs New Credit Card Bill Into Law
President Obama signed the U.S. Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 on Friday.
"Our business is changing," said Bank of America's Global Card Services President Ric Struthers,"It is changing partly because of the new law, but more importantly because customers are changing. They want rates and fess to be fair and to remain consistent. They want to be able to read and understand the terms and conditions of their credit card agreements. They want to be informed and know what it costs them to use a credit card. We completely agree."
Similar to regulations passed by the Federal reserve late last year, he new legislation restricts credit issuers; ability to price customers to reflect their individual risk, changes the way payments are applied to customer accounts and requires new disclosures. The majority of the provisions in the law became effective next February.
Some key provisions in the new law include:
- Prohibiting over limit fees unless the customer opts in to being allowed to go over the limit.
- Allocating payment amounts above the required minimum only to the highest rate balances first.
- Prohibiting rate increases on existing balances except in limited circumstances, including when cardholder payment is at least 60 days past due.
- Requiring statement disclosures that indicate how long it would take to pay off a balance if the customer only pays the minimum each month.
- Ensuring young people under 21 have a cosigner or are able to demonstrate financial ability to repay the loan before they are issued a credit card account.
"While there will be a significant impact to the card business," said Struthers, "ours goals remain the same: to responsibly lend to the broadcast number of customers possible, while protecting the safety and soundness of our company, and providing an appropriate return to our shareholders."
In the fourth quarter last year, Bank of America extended $8 billion of unsecured consumer credit and loan another $6 billion in the first quarter of this year.
"The payments business, including credit cards , is here to stay," Struthers said.
in 2008, U.S. cardholders charged more than $2 trillion in total volume, 14 percent of the U.S. gross domestic product.
"The credit card is embedded in our financial system," he concluded.
Should I Stop Contributing To My 401K If I Want To Pay Off My Credit Cards?
I Haven't Paid My Credit Card Bills In Years. Why Am I Being Told I Still Owe Money?
Can Credit Card Companies And Collectors Harass Me at Work?
Everyone Has a Credit Card Horror Story
"Our business is changing," said Bank of America's Global Card Services President Ric Struthers,"It is changing partly because of the new law, but more importantly because customers are changing. They want rates and fess to be fair and to remain consistent. They want to be able to read and understand the terms and conditions of their credit card agreements. They want to be informed and know what it costs them to use a credit card. We completely agree."
Similar to regulations passed by the Federal reserve late last year, he new legislation restricts credit issuers; ability to price customers to reflect their individual risk, changes the way payments are applied to customer accounts and requires new disclosures. The majority of the provisions in the law became effective next February.
Some key provisions in the new law include:
- Prohibiting over limit fees unless the customer opts in to being allowed to go over the limit.
- Allocating payment amounts above the required minimum only to the highest rate balances first.
- Prohibiting rate increases on existing balances except in limited circumstances, including when cardholder payment is at least 60 days past due.
- Requiring statement disclosures that indicate how long it would take to pay off a balance if the customer only pays the minimum each month.
- Ensuring young people under 21 have a cosigner or are able to demonstrate financial ability to repay the loan before they are issued a credit card account.
"While there will be a significant impact to the card business," said Struthers, "ours goals remain the same: to responsibly lend to the broadcast number of customers possible, while protecting the safety and soundness of our company, and providing an appropriate return to our shareholders."
In the fourth quarter last year, Bank of America extended $8 billion of unsecured consumer credit and loan another $6 billion in the first quarter of this year.
"The payments business, including credit cards , is here to stay," Struthers said.
in 2008, U.S. cardholders charged more than $2 trillion in total volume, 14 percent of the U.S. gross domestic product.
"The credit card is embedded in our financial system," he concluded.
Should I Stop Contributing To My 401K If I Want To Pay Off My Credit Cards?
I Haven't Paid My Credit Card Bills In Years. Why Am I Being Told I Still Owe Money?
Can Credit Card Companies And Collectors Harass Me at Work?
Everyone Has a Credit Card Horror Story
Friday, May 22, 2009
Be Careful When Transferring Your Balance To A Lower Interest Rate Credit Card
I love reading articles from Gerri Willis, CNN personal finance editor and author of the book "Home Rich: Increasing the Value of the Biggest Investment of Your Life". Mainly because she has the same view on personal finance that we do.
We've discussed many time at being aware of the possible cost, higher interest rates, and excessive fees when you apply for a balance transfer with a new credit card.
Most people now the term APR (annual percentage rate) but the number of credit card holders should really pay attention to "effective APR."
"An effective APR represents your total cost of credit. Now, keep in mind, this may be more than just an interest rate. If you are paying an annual fee, if you incurred a balance transfer when transferring the balance to that card...those are costs that will add to the interest rate that you're effectively paying, effectively raising the cost that you pay on that balance." says Greg McBride, senior financial analyst at bankrate.com.
Gerri suggests to beware of:
- Introductory rates
- Payment schedules
- Cash advance fees
- Late Fees
- Default rates
Be sure you crunch the numbers when determining the best credit card for you.You can manage these expenses very easily by following these simple rules: make your payments on time, keep an eye on your rate schedule and avoid cash advances whenever possible.
We've discussed many time at being aware of the possible cost, higher interest rates, and excessive fees when you apply for a balance transfer with a new credit card.
Most people now the term APR (annual percentage rate) but the number of credit card holders should really pay attention to "effective APR."
"An effective APR represents your total cost of credit. Now, keep in mind, this may be more than just an interest rate. If you are paying an annual fee, if you incurred a balance transfer when transferring the balance to that card...those are costs that will add to the interest rate that you're effectively paying, effectively raising the cost that you pay on that balance." says Greg McBride, senior financial analyst at bankrate.com.
Gerri suggests to beware of:
- Introductory rates
- Payment schedules
- Cash advance fees
- Late Fees
- Default rates
Be sure you crunch the numbers when determining the best credit card for you.You can manage these expenses very easily by following these simple rules: make your payments on time, keep an eye on your rate schedule and avoid cash advances whenever possible.
Wednesday, May 13, 2009
Where To Find The Best Credit Cards
Finding the best credit cards can be confusing, but here is what we found on CNNMoney recently. Picks that offer great perks to suit your spending habits.
1. Balance Transfers
The Card: iberiaBank Visa Classic
Website: creditcardsiberiabank.com
Rate: 6.25%-8.25%
This card offers zero interest on balance transfers for six months- and there is no balance transfer fee.
2. A little cash back
The Card: Schwab Bank Invest First Visa
Website: Schwab.com
Rate: 13.99%
Earn 2% unlimited cash back on every single purchase you make. You must have a Schwab One brokerage account, but there are no fees to open or maintain it.
3. A lot of cash back
The Card: Blue Cash from American Express
Website: americanexpress.com
Rate: starts at 7.99% plus prime
Charge at least $6,500 a year, and your cash-back percentage zooms from 1% to 5% on purchases at gas stations, supermarkets, and drugstores, and from 0.5% to 1.5% on everything else.
4. Cash at the pump
The Card: Pentagon Federal Visa Platinum
Website: penfed.org
Rate: 13.99%
Get 5% unlimited cash back at the pump, plus 2% on supermarket purchases and 1.25% on everything else. You must join a credit union to get the card.
5. Travel Miles
The Card: Escape by Discover
Website: discovercard.com
Rate:10.99% to 18.99%
Earn two miles for every dollar spent, plus 1,000 bonus miles each month you make a purchase for the first 12 months. Drawback: a $60 annual fee.
1. Balance Transfers
The Card: iberiaBank Visa Classic
Website: creditcardsiberiabank.com
Rate: 6.25%-8.25%
This card offers zero interest on balance transfers for six months- and there is no balance transfer fee.
2. A little cash back
The Card: Schwab Bank Invest First Visa
Website: Schwab.com
Rate: 13.99%
Earn 2% unlimited cash back on every single purchase you make. You must have a Schwab One brokerage account, but there are no fees to open or maintain it.
3. A lot of cash back
The Card: Blue Cash from American Express
Website: americanexpress.com
Rate: starts at 7.99% plus prime
Charge at least $6,500 a year, and your cash-back percentage zooms from 1% to 5% on purchases at gas stations, supermarkets, and drugstores, and from 0.5% to 1.5% on everything else.
4. Cash at the pump
The Card: Pentagon Federal Visa Platinum
Website: penfed.org
Rate: 13.99%
Get 5% unlimited cash back at the pump, plus 2% on supermarket purchases and 1.25% on everything else. You must join a credit union to get the card.
5. Travel Miles
The Card: Escape by Discover
Website: discovercard.com
Rate:10.99% to 18.99%
Earn two miles for every dollar spent, plus 1,000 bonus miles each month you make a purchase for the first 12 months. Drawback: a $60 annual fee.
Senate deal on credit cards slows!
The smack down on credit card companies had grown very popular and President Obama has stated that he would like to have the bill on his desk by Memorial Day. The Senate's new bill is tougher than a similar bill passed in the House last month. The Senate bill still faces possible amendments and could change further.
The current Senate Bill would:
- Go into effect nine months after passage, which is sooner than the House bill.
- Ban gift card issuers from charging "dormancy fees" on cards redeemed too late: the House bill doesn't address gift cards
- Prevent those under 21 from getting a credit card unless they can prove they have an income stream to pay off debt or have their parent's signature; the House bill places less onerous restrictions on those under 18.
- Allow credit card issuers to raise fees if a consumer is 60 days late on a payment, the House bill and Federal Reserve rules allow fee hikes after payment is 30days late.
Credit card industry advocates caution that the Senate bill won't be the final word on the issue, and they plan to fight some of the provisions.
"We have serious concerns with the Senate bill, and we oppose any amendments to the bill," Scott Talbott, a lobbyist for the Financial Services Roundtable, an industry group.
At the rate things are moving it will end up being next year July before this gets done. That's when the original bill was scheduled to go into action. If you think this is the right thing to do, press to have this bill passed.
The current Senate Bill would:
- Go into effect nine months after passage, which is sooner than the House bill.
- Ban gift card issuers from charging "dormancy fees" on cards redeemed too late: the House bill doesn't address gift cards
- Prevent those under 21 from getting a credit card unless they can prove they have an income stream to pay off debt or have their parent's signature; the House bill places less onerous restrictions on those under 18.
- Allow credit card issuers to raise fees if a consumer is 60 days late on a payment, the House bill and Federal Reserve rules allow fee hikes after payment is 30days late.
Credit card industry advocates caution that the Senate bill won't be the final word on the issue, and they plan to fight some of the provisions.
"We have serious concerns with the Senate bill, and we oppose any amendments to the bill," Scott Talbott, a lobbyist for the Financial Services Roundtable, an industry group.
At the rate things are moving it will end up being next year July before this gets done. That's when the original bill was scheduled to go into action. If you think this is the right thing to do, press to have this bill passed.
Monday, May 4, 2009
If I Shouldn't Take 401K Loan Out To Pay For My Children's Education, How About A 401K Loan?
This is a similar question to the one we answered regarding taking out a 401K loan to pay off credit card debt, with a similar answer...Don't do it. You must resist the temptation to take a 401K loan out to pay for other expenses. In the state of the current economy it is very dangerous to borrow money from your 401K. Although the economy is improving, layoffs are still occurring. A layoff can happen at any time and if it does your loan will be treated as a withdrawal. You will have to pay income tax on the entire amount you borrowed and if you are under 59 1/2 you will have to pay a 10% early withdrawal on top of it. If you need money for college, federal student loans are your best bet.
Sunday, May 3, 2009
Should I Stop Contributing To My 401K To Start Saving For College For My Children?
We discussed a similar question about stopping contributions to your 401k's to pay off credit card debt. I know you love your children and want the best for them. This is going to sound selfish, but you should not stop contributing to your 401k to fund your children's college education.
If you are looking for additional funds to pay for your children's education then it is obvious that you probably don't have an emergency fund either. Right now in the current state the economy is in, it is imperative to have an emergency fund of least six to eight months of expenses.
Again I know you want your children to be able to live up to their full potential, but jeopardizing your financial security is not the way to do it. Also in this point in time, your 401K has probably taken a beating. When people's investments tank their instincts tell them to run, but this is not the time to run. It is the time to stand and fight. You need to keep your money in your 401k and continue to invest even though it doesn't seem like the right thing to do. I am assuming that you have at least ten years until you retire. The reason I am telling you to keep your money in your 401K is this: When the market is down you are able to buy more shares of what you are investing in, and the more money you will make when the stock market goes back up.
Also, you are going to need as much money as you can get your hands on when you retire. With the threat of social security being gone one day your 401k, IRA's, and cash savings will be all that you will have to rely on. If you don't have retirement savings you may one day be a financial burden to your children. So unless you want to work for the rest of your life or live with your children after retirement don't withdrawal funds from your 401k to pay for your children's education. I am not telling you to leave your children high and dry without an education. There are several federal loan programs to choose from, whether it be the military, employer tuition assistance, or loan forgiveness programs to pay for a college education.
If you are looking for additional funds to pay for your children's education then it is obvious that you probably don't have an emergency fund either. Right now in the current state the economy is in, it is imperative to have an emergency fund of least six to eight months of expenses.
Again I know you want your children to be able to live up to their full potential, but jeopardizing your financial security is not the way to do it. Also in this point in time, your 401K has probably taken a beating. When people's investments tank their instincts tell them to run, but this is not the time to run. It is the time to stand and fight. You need to keep your money in your 401k and continue to invest even though it doesn't seem like the right thing to do. I am assuming that you have at least ten years until you retire. The reason I am telling you to keep your money in your 401K is this: When the market is down you are able to buy more shares of what you are investing in, and the more money you will make when the stock market goes back up.
Also, you are going to need as much money as you can get your hands on when you retire. With the threat of social security being gone one day your 401k, IRA's, and cash savings will be all that you will have to rely on. If you don't have retirement savings you may one day be a financial burden to your children. So unless you want to work for the rest of your life or live with your children after retirement don't withdrawal funds from your 401k to pay for your children's education. I am not telling you to leave your children high and dry without an education. There are several federal loan programs to choose from, whether it be the military, employer tuition assistance, or loan forgiveness programs to pay for a college education.
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 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.
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.
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.
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%.
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.
Monday, April 27, 2009
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.
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