Archive for October, 2009


Is Overdraft Protection Right For You?

Sometimes life can throw a curve ball at you and you find yourself on the boarder of over drafting your bank account.  Or perhaps your finances come down to the wire every month and over drafting your account is a possibility every month.  Trying to balance the details of life can be difficult and most Americans have faced an over draft fee.  So what can be done to avoid these fees when faced with this situation?

What is Over-drafting Your Account?

Instead of bouncing checks, banks now accept the payment and as a penalty for spending more money then you have in your account they charge you a fee.  The overdraft fee typically costs around $30-$40.

Here is one problem: Banks are cashing in from the overdraft policy. It seems better to be denied a purchase, especially a minute purchase like a cup of joe, is better then incurring  a $35 overdraft fee. But in the name of protection and avoiding embarrassment for the customer, banks institute the overdraft policy.  Quite a way to make an extra buck.

Computing Overdraft Fees

The issue of overdraft fees goes like this…

If you overdraft your account you get say a $35 overdraft fee, but it doesn’t start there.  Say your previous 4 financial transactions were $50, $30, $5 and $5, and you only have $70 in the bank.  Once processed by the back, highest amount to lowest amount, your $50 payment go through and now you have $20 in the bank.  Therefor the $30 transactions overdrafts your account and a $35 fee is enforced.  Followed by a $5 transaction AND another $35 fee, follow by another $5 AND another $35 fee.  That is $105 in fees.

How do you stop this from happening?

Many banks have the option to open an overdraft line of credit.  If you overdraft your checking account the amount you over-drafted will be pull from the overdraft line of credit (which is just like a standard LOC and charges interest).

You will be responsible to pay the balance as well as the extra interest charges on the loan.  If you pay the balance of quickly the “fees” or interest charges will be far less then the $35 or more you typically pay.

Although this is a good alternative to paying high overdraft fees it can cost you much more if you continually hold a balance on this line of credit. You will eventually pay more in interest then just a few overdraft charges, being as these LOC interest rates are typically abysmal.  Not to mention if the line of credit is used just once an annual fee is usually charged.

So do you have any other options?

Some financial institutions have a 2nd option for you, called a savings transfer.  In this form of overdraft protection you need a savings account at the same banking institution that you have your checking account with.  The two accounts are linked and when you overdraft on your checking account a transfer from your savings account to your checking account  is automatically made to cover the cost of the overdraft.

This option does not go without its fees though.  Typically a smaller “transfer” fee of around $10 is incurred for overdraft transfers. $10 is much better then $35.

The catch here is that you need money in the savings account that can cover the cost of the overdraft. If you have no money in savings then the overdraft line of credit is the better option.

The best answer for you.

Sure setting up overdraft protection is a great idea for those that have that occasional hic-ups, but overdraft protection should never be a long term solution.  If you are continually facing overdrafts in your checking account month after month learning better money management is the best answer for you.

Learning to keep an active budget and managing your money will save you far more money then overdraft protection.


Credit Card Rewards – Are They Worth It Now?

credit card rewards pointsToday credit card companies are doing everything to lure you into getting their credit card. Not only are banks scaling back on their offers, but credit card companies are also following along. The usual “lure ‘em, catch ‘em and leave ‘em” approach is what most all credit card companies are adopting now-a-days. If they offer a product or service that does not generate enough money to continue the program they will either cut the rewards program or the most common is to raise the fees.

People think that the Credit Card Act of 2009 is going to make plastic that much safer, but that is not the case as we are not safer now as compared with previous months. What the Credit Card Act of 2009 will do is make it harder for the consumers as credit card companies are now finding more innovative ways of making up for the lost revenue. (Look at this post about CitiBank raising their rates to 29.99%!) Bank of America announced that it will impose an annual fee ranging between $29 and $99, right after they said they would not be raising interest rates before the second phase of the CARD Act, which goes into effect on February 2010.

On top of all of the rate-hiking, fee-adding and credit limit-cut backing card issuers, they have found other ways of adding to their bottom line, by making changes to how you can use your rewards points. Some policies have become so stringent that for many consumers, they are having to say goodbye to in-flight upgrades, free hotel stays or using their points for that special something they have been saving up for, sometime for years.

Some people have no idea the kinds of changes that are being made to your credit card rewards programs, you might want to check the list below to see if you are affected.. yet.

  • Most major credit card companies including American Express, Bank of America, Chase, Discover, Capital One and Citibank will invalidate any rewards points accumulated in a billing cycle during which a cardholder’s account was delinquent.
  • Discover Bank goes a step further by revoking all point or miles earned by an account holder under the rewards program if he is late in his payments for two consecutive months.
  • Discover’s three-tier cash back program is now down to just two tiers. In the company’s previous scheme, a consumer earns 0.25% percent for the first $1,500 spent, 0.5% for the next $1,500, and 1% for whatever amount spent above $3,000. Presently, the program has been reduced to just 0.25% for the first $3,000 and 1% for anything over that.
  • American Express scaled back the rebate for its Blue Card cash-back program, now offering 1.25% instead of the previous 1.5%.
  • American Express is also increasing the maximum fee that accountholders under its Membership Rewards program would need to shoulder to transfer earned points to a U.S. airline loyalty program. From $75, the cost is now at $99 effective last September.
  • Citibank has also made changes to its travel redemption program. A domestic round-trip airline ticket worth about $400 used to cost the cardholder 20,000 points. Now redemption for the same item will require 40,000 points.
  • Starting next year, the Citi Hilton HHonors Visa will require 12,500 points, up from 10,000, for a free room.
  • The Citi Home Depot Rewards MasterCard will be discontinued. Cardholders can only use them until October 31, while rewards points may be redeemed only until January 31, 2010.
  • The Citi mtvU Visa card, which allows students to earn points that are convertible to cash for student loan payments, now requires 12,700 points for every $100. That used to be 10,000 points.

The most unpleasant surprise for credit card customers is that any credit card company can change the terms and conditions to any of their rewards programs at any time, or even cancel it altogether for any reason. All of those built up points could go to waste, maybe the very reason why you joined the credit card company and now you cannot even use your points for the rewards you wanted.

Do not expect these changes to go away because they are here to stay for good. Banks are still making difficult decisions as they need to balance profitability and services so it would be wise for the consumer to act fast and cash in on their rewards points sooner than later, or risk losing out.


Visa Sponsors the Olympics for Another 10 Years

Visa Remains Olympic Credit Card Sponsor

Visa Remains the Sole Credit Card Sponsor for the Olympics

With the 2010 Winter Olympics in Vancouver just over the horizon, Visa has decided to extend its contract with the Olympic Games through 2020.

Visa will remain the sole payment services sponsor of Olympic Games.

Since 1986 visa has been an official sponsor of the Olympic Games. This will continue at least through 2020.

This means Visa has sponsored the Olympics through some of the greatest games ever.

  • 1984 – Summer Games: Los Angeles, USA
    Winter Games: Sarajevo, Yugoslavia
  • 1988 – Summer Games: Seoul, South Korea
    Winter Games : Calgary, Canada
  • 1992 – Summer Games: Barcelona, Spain
    Winter Games: Albertville, France
  • 1994 (Games Split Every 2 Years) Winter Games: Lillehammer, Norway
  • 1996 - Summer Games: Atlanta, USA
  • 1998 – Winter Games: Nagano, Japan
  • 2000 – Summer Games: Sydney, Australia
  • 2002 – Winter Games: Salt Lake City, United States
  • 2004 – Summer Games: Athens, Greece
  • 2006 – Winter Games: Turin, Italy
  • 2008 – Summer Games: Beijing, China (Michael Phelps 8 Gold Medals!)

Visa will continue to sponsor the Olympics through what are guaranteed to be another great decade of the games. Including Olympic Games in

  • 2010 – Winter Games: Canada Vancouver, Canada
  • 2012 – Summer Games: United Kingdom London, United Kingdom
  • 2014 – Winter Games: Russia Sochi, Russia
  • 2016 – Summer Games: Brazil Rio de Janeiro, Brazil
  • 2018 – Winter Games: Location Undecided
  • 2020 – Summer Games: Location Undecided

Stretching beyond just sponsoring the Olympic games Visa sponsors many Olympic and Paralympic athletes.  Visa has provided funding and financial support to help athletes reach their full potential during the games and more importantly during their normal lives.

By using your Visa card you are helping support and sponsor team USA for the Olympic Games.  Team USA is in no way financially supported by our government, meaning sponsors like Visa and others help fund team USA’s efforts.

Good Luck to Team USA and Visa in the 2010 Olympics in Vancouver, Canada.


Comerica Bank Offers $400 Small Business Checking Bonus

Comerica Bank is giving out a $400 bonus for its small business customers. This is their way of giving your business a stimulus package. This offer is being called the “Comerica Small Business Sensible Stimulus Package”.

Unlike most bank bonuses, which require you to sign up for a new banking account, Comerica is giving its bonus to active Comerica business checking accounts. These are people who already have an opened account with the bank. To be active you must have 5 or more customer-initiated transactions per statement cycle. Along with having an active account, you will need to establish a new qualifying account and/or service between October 5 and November 27th, 2009. You can register at Comerica.com/grow by December 8th, 2009 and your participation will begin on the first month after you have registered.

Comerica Stimulus Package Bonuses

  • You will receive $100 bonus when you subscribe to and use the Comerica Bank Payment Solution Package for 6 months.
  • You will receive another $100 when you use your Comerica Business Check Card an average of 6 or more time each month for 6 months.
  • $50 when you open a new Comerica Business Credit Card.
  • $100 when you sign up for and use Comerica Merchant card processing services (speak to their merchant services to find if you can get a better rate than you currently are).
  • $50 when you sign up for and use Comerica Business Deposit Capture for 6 months.

Most banks offer bonuses to get you to deposit new money into their bank, so Comerica has added another incentive to add money to your account. When you add $25,000 of new money in your Comerica Business Checking Account, you will receive:

  • A free scanner
  • Waived start-up costs
  • A free 2-year maintenance plan.
  • A total benefit valued at $674

Additional details of this deal:

Qualifying bonus payments will be deposited into your Comerica business checking account about 6 months after your eligibility.

You must keep each account open and active for at least 6 consecutive months to qualify.

A maximum cash bonus of $400 will be paid per business. Limit one payout per business entity.

This program and bonuses ends August 31, 2010. Cash bonus is considered interest and will be reported on IRS form 1099-INT.

Learn more about this deal here.


CD Rates Reverse and Head Back Down in October

After slight increases in August and September long term CD rates (2,3 and 5 year certificates) have reversed course and have headed back down for the month of October.

Hopes have been high that the raises in August and September may have marked the end to the spiraling CD rates, but as it stands now long term rates are just barely above the record low we saw in the month of July.

The shorter term certificate of deposits have also reversed course albeit not as bad as the long term CD’s.

What does this mean for you?

It means not much has changed.  The same rules that applied for borrowing back in July and August and still the same as we head into November.  The decline in CD rates may not yet have reached its bottom, although hopes are still high that this is merely a short dip and soon the CD rates will rebound and continue to rise.

Remember the general rule of thumb: Go short when CD rates are low and you think they’re going to go up, and go long when interest rates are high and you think they’re going to go down.

CD Rates are obviously low and we are hoping they will increase.  So now may not be the best time to go long.

Here you can check out the best CD rates from banks across the country. Interest Checking Accounts may be a great alternative while CD rates are still so low.  Interest checking will allow you to have continual access to your money, and still be earning comparable interest to CD accounts.


Highest CD Rates In Oklahoma City, OK – October 2009

Here is a list of the highest yielding CD (certificate of deposit) rates for the residents of Oklahoma City, OK. These CD rates will come in the form of the 6 month CDs, 12 month CDs and 24 month CDs. After going through several rate pages from local banks and credit unions serving Oklahoma City and most of Oklahoma, we have found that most rates are lower than the national average, you are better off finding national institutions than with local ones.

Keep in mind that CD rates are always changing and are time sensitive in nature, so be sure to check the date of this article for accuracy. You can always find the best national CD rates from our CD rates page.

How we came up with this list:

The highest CD rates are usually kept for the longer maturities and/or those with the highest minimum deposit and since we wanted to keep in mind that our average investor does not have loads of money stashed around, we wanted to give you more options with the best CD rates that we have found.

Highest 6 Month CD Rates In Oklahoma City, OK:

  • Sooner State Bank (The Village, OK) – 6 month CD yields 2.02% APY with a minimum deposit of $10,000.
  • Communications Federal Credit Union – 6 month CD yields 1.90% APY with a minimum deposit of $1,000.
  • WEOKIE Credit Union (Edmond, OK) – 6 month CD yields 1.87% APY with a minimum deposit of $1,000.

Highest 12 Month CD Rates In Oklahoma City, OK:

  • Midfirst Bank – a promotional 15 month CD yields 2.10% APY with a minimum deposit of $5,000.
  • Sooner State Bank – 12 month CD yields 2.07% APY with a minimum deposit of $10,000.
  • Oklahoma Employees Credit Union – 12 month CD yields 2.02% APY with a minimum deposit of $500.

Highest 24 Month CD Rates In Oklahoma City, OK:

  • Tinker Federal Credit Union (Bethany, OK) – 24 month CD yields 2.68% APY with a minimum deposit of $10,000.
  • Communications Federal Credit Union – 24 month CD yields 2.55% APY with a minimum deposit of $1,000.
  • Sooner State Bank’s – 24 month CD yields 2.53% APY with a minimum deposit of $1,000.

All of the above banks and credit unions are federally insured by either the FDIC or NCUA. Be sure to check with your bank to make sure they are still federally insured and do not give them your money if they are not. If you live in or around Oklahoma City, OK and know of better CD rates please let us know.


Sovereign Bank Offers A Save & Invest CD Package At 2.25%

Sovereign Bank has come out with a limited time offer to help you save and invest your money at the same time. The Save & Invest CD Package takes your money and splits it between two CDs, with half put in a 6 month CD at 2.25% APR and the other half put in a 36 month CD term.

The key is to diversify

This is a great way to diversify your money between saving it and investing it at the same time in a high paying CD package. As half of your money earns a steady high interest rate of 2.25% for 6 months, the other part of your money will be linked to investments in the S&P 500. A great aspect of the 6 month CD term is that there is no early withdrawal penalty, which will give you access to that half of your money.

The best part about the 36 month CD investment is that unlike some longer term investments, it is FDIC insured. In an economy like ours, it is vital to make sure you put your money in a safe institution that is federally insured. The guarantee you have with the 36 month CD is that you will not lose any of your investment, the only penalty for the S&P going down will be that you will not receive any interest for the period. For every year that the S&P goes up you will receive a great interest rate.

Additional details about this offer:

  • Minimum combined deposit for the CD package is $5,000.
  • Must be opened before November 27th, 2009
  • The Invest CD matures on November 30th, 2009; the term will be 36 months from that date.
  • There is an early withdrawal penalty for the Invest CD, and within 6 days of opening the Save CD.

This great offer from Sovereign Bank offers you an easy and low risk way of both saving and investing your money. For more information, visit the Sovereign Bank promotional page here.


Highest CD Rates In Sacramento, CA – October 2009

Here is a list of the highest CD (certificate of deposit) rates available to the residents of Sacramento, California. We have compiled a list of the best CD rates for the 6 month CD, 12 month CD and 24 month CD terms. After going through many local bank rates and credit unions serving the city of Sacramento as well as Central California we have found that you will find better rates with national institutions than with your local ones.

Be mindful that CD rates are always changing and that these rates may be out of date depending on the date of this article. You can always find up to date CD rates from our CD rates page.

How we came up with this information:

As you may very well know that if you are looking for the highest CD rates you will need to look at the longer maturities such as the 60 month CD or CDs that require a high minimum deposit.

Highest 6 Month CD Rates In Sacramento, CA:

  • UFB Direct – 6 month CD yields 1.70% APY with a minimum deposit of $8,000. This is a national bank and will accept deposits from other states.
  • First Financial Bank (Sacramento branch) – A promotional 10 month CD yields 1.50% APY with a minimum deposit of $500.
  • Community Business Bank of West Sacramento – 6 month CD yields 1.45% APY with a minimum deposit of $10,000.

Highest 12 Month CD Rates In Sacramento, CA:

  • Colorado Federal Savings Bank (Sacramento branch) – 12 month CD yields 2.0% APY with a minimum deposit of $5,000.
  • Community Business Bank – 12 month CD yields 2.0% APY with a minimum deposit of $10,000.
  • iGoBanking.com – 12 month CD yields 2.0% APY with a minimum deposit of $1,000. This is an online institution with will accept deposits from any state.

Highest 24 Month CD Rates In Sacramento, CA:

  • Hudson City Savings Bank – 24 month CD yields 2.50% APY with a minimum deposit of $5,000. This bank can accept deposits from any state.
  • First Financial Bank – A promotional 25 month CD yields 2.50% APY with a minimum deposit of $10,000.
  • CitiBank (Carmichael, CA branch) – 24 month CD yields 2.25% APY with a minimum deposit of $1,000.

All of these banks and credit unions are federally insured. Make sure the bank or credit union you deposit your money to is insured by either the FDIC or NCUA. If you live in or around Sacramento, CA and you know of a better CD rate please let us know.


Highest CD Rates In Alaska – October 2009

These are the highest CD (certificate of deposit) rates we have found for the residents of Alaska. These rates are listed in the 6 month CDs, 12 month CDs and 24 month CDs. After going through many local banks and credit unions serving the cities of Anchorage, Juneau and the surrounding state of Alaska, we have found that you may find higher rates with national banks than with local ones.

Be sure to remember that these rates are time sensitive and that the information provided may be out of date depending on the date of this article. CD rates are constantly changing so we encourage you to keep up to date with our list of the best CD rates currently available.

We have put together a list of the highest paying CD rates based on the 6 month, 12 month and 24 month terms. We already know that the longer the maturity the higher the CD rate will be, but wanted to keep our list simplified.

Highest 6 Month CD Rates In Alaska, AK:

  • Nexity Bank – 6 month CD yields 1.65% APY with a minimum deposit of $1,000. This is a national bank and will accept deposits from any state.
  • Advancial Federal Credit Union (Anchorage branch) – 6 month CD yields 1.48% APY with a minimum deposit of $1,000.
  • Denali Alaskan Federal Credit Union (Juneau branch) – 6 month CD yields 1.35% APY with a minimum deposit of $500.

Highest 12 Month CD Rates In Alaska, AK:

  • Tongas Federal Credit Union (Metlakatla, AK) – 12 month CD yields 2.35% APY with a minimum deposit of $500.
  • Alps Federal Credit Union (Sitka, AK) – 12 month CD yields 2.25% APY with a minimum deposit of $500.
  • Denali Alaskan Federal Credit Union – 12 month CD yields 2.06% APY with a minimum deposit of $500.

Highest 24 Month CD Rates In Alaska, AK:

  • Hudson City Savings Bank – 24 month CD yields 2.50% APY with a  minimum deposit of $5,000. This is a national bank and will accept deposits from any state.
  • Alps Federal Credit Union – 24 month CD yields 2.32% APY with a minimum deposit of $500.
  • Denali Alaskan Federal Credit Union – 24 month CD yields 2.30% APY with a minimum deposit of $500.

All of the above banks and credit unions are federally insured by either FDIC or NCUA. Always be sure your bank or credit union is federally insured before giving them your money. If you live in or around Alaska and know of better rates please let us know.


Highest CD Rates In Minneapolis, MN – October 2009

These are the highest CD (certificate of deposit) rates for the residents of Minneapolis, Minnesota. These rates are in the form of 6 month CDs, 12 month CDs and 24 month CDs. After going through many rates from local banks and credit unions serving Minneapolis as well as the whole state of Minnesota, we found that you will find slightly higher rates from national institutions or online banks.

Remember that CD rates are ever changing, so the rates posted below may be out of date depending on the date of this article. Be sure to check out the most current CD rates from national banks.

As you may know, the longer the maturity date of a CD, the higher the interest rate you will find. Since we did not want to strictly list the highest yielding CDs, we have posted the best rates we have found for the specified time periods.

Highest 6 Month CD Rates In Minneapolis, MN:

  • People’s Bank of Commerce (Edina, MN) – promotional 7 month CD yields 1.90% APY with a minimum deposit of $5,000.
  • TruStone Financial – 6 month CD yields 1.86% APY with a minimum deposit of $500.
  • Union Bank and Trust – 6 month CD yields 1.76% APY with a minimum deposit of $10,000.

Highest 12 Month CD Rates In Minneapolis, MN:

  • TruStone Financial – 12 month CD yields 2.27% APY with a minimum deposit of $500.
  • HiWay Federal Credit Union (St. Paul, MN) – 12 month CD yields 2.10% APY with a minimum deposit of $10,000.
  • Vision Bank (Saint Louis Park, MN) – 12 month CD yields 2.07% APY with a minimum deposit of $1,000.

Highest 24 Month CD Rates In Minneapolis, MN:

  • Hudson City Savings Bank – 24 month CD yields 2.50% APY with a minimum deposit of $5,000. This is a national bank and can accept deposits from any state.
  • 1st Regents Bank (Blaine, MN) – 24 month CD yields 2.50% APY with a minimum deposit of $10,000.
  • HiWay Federal Credit Union – 24 month CD yields 2.50% APY with a minimum deposit of $5,000.

All of the above institutions are federally insured by the FDIC or NCUA. Be sure you make sure that the bank or credit union you deposit your month with is federally insured. If you live in or around Minneapolis, MN and know of better CD rates please let us know.

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