Archive for September, 2011


Bank of America Plans To Charge Fees For Debit Card Use

It seems like the time of freely swiping your debit card is almost over. Bank of America Corp., one of the largest banks throughout the United States is planning to place a monthly fee on anyone who makes use of their debit card. They say that they need to do it in order to recoup the revenue it will lose because of the government regulations that will cap the amount they can charge for debit-card transactions.

Banks are estimated to lose about $6.6 billion in revenue due to federal limits on “swipe fees”. To offset this loss, banks have either withheld on debit rewards, added monthly fees on checking accounts, and raised the minimum balance requirement to avoid fees. Now, banks have come up with another solution to regain their losses.

Bank of America plans to charge $5 for every month of debit card usage. Other large banks such as JP Morgan Chase & Co. and Wells Fargo & Co. have been testing similar fees in some states. JP Morgan begun testing in a small market in Wisconsin since February while Sun Trust Banks have begun charging a $5 monthly fee for unlimited usage of their debit card since June.

While big banks seem to be following suit with Bank of America’s decision, the reaction of their customers haven’t yet been taken into account. Allison Miller, Bank of America customer in New Jersey said that she is most likely to switch banks because of the new fee. This reaction is expected in many of their consumers since no one likes to have extra fees being charged to them monthly. The question is, whether or not these customers will take the time and effort in switching banks.

The $5 fee that Bank of America plans to charge is higher than what other banks are willing to charge their customers. Other banks who have decided to follow on BofA’s decision are charging $3, or at most $4. It remains to be seen what consumers will say with regards to all this, but it is expected that they will be unhappy.


Retirement Planning Tips for People Over 40

You’re still in your 20’s, you’re young, fresh, and ready to take on the world. With your first job paying you a decent salary, you decide to spend it all and worry about the future later. Then, you’re in your 30’s, you start having a family and expenses suddenly go up, you think, there’s still lots of time to save for retirement. Then you’re in your 40’s and that’s when you realize… gulp. You should’ve started saving for retirement a long time ago.

With the baby boomers nearing retirement, this scenario can be oh so familiar. For those who are in their 40’s and don’t have a retirement plan yet, don’t worry, there’s still time to make a difference. Below are some retirement saving tips that will make sure you live a comfortable life even when you’re 80.

Being Financially Responsible

The first step is learning to understand your finances. If you haven’t developed a budget for your expenses, then it’s about time you make one. Having a budget can allow you to keep track of where your money goes. This also gives you an insight as to how much you need to live on for the next couple of years. Having a budget can also allow you to make smart decisions on where you can cut down on expenses so you can put more to your retirement account.

Saving and Investing

When saving for your retirement, it doesn’t mean just putting your money away in the bank. Given the limited time you have left, it’s best to invest your cash in safe but still competitive vehicles that will optimize the interest your money can earn without fear of losing it at the time you need it. Starting a retirement plan such as a 401(k) or a 403(b) would be a good place to start. To allow diversity, mutual funds would also be a good place to invest in. Read about the top performing mutual funds in the country and choose a company that is known for its reputation over expected growth. Another area to invest in would be in high interest certificates of deposit.

Implementing Measures

Saving for your retirement late can have obvious consequences such as having to sacrifice more on your present living conditions. To achieve your retirement goals, it would be realistic to cut down on expenses that aren’t really necessary such as passing on that Starbucks cup. Having an extra $100-$200 directed to your retirement account would help a whole lot once it accumulates. Other places to cut expenses would be disconnecting the cable service, using fans instead of air conditioners, and perhaps doing the laundry yourself.

In some cases, even cutting down on these little expenses still won’t allow a comfortable retirement. In that case, it’s time to think about reducing your lifestyle expenses significantly such as moving to a smaller home, trading that expensive car that chugs gasoline like a camel for a more economic vehicle, or even moving to a smaller city with a low cost of living.

Finally, when all else fails, retiring in a third world country with a weaker currency can also be an option since the value of the dollar can buy you a more luxurious life there. After all, the tropics is the ideal place to retire with all the beaches and the comfortable weather throughout the year. Just make sure to bring your partner with you to avoid loneliness.


Leighton State Bank Offers 2.5% Interest On Savings Accounts!

Bank rates have been falling lower and lower, and nowadays it’s rare to find an annual rate that can climb to 1.5%. However, a special and limited time only rate from Leighton State Bank can cause investors eyes to sparkle as we see a savings account rate that is hardly available at these bleak times. Leighton State Bank is currently offering a mind blowing 2.5% APY on deposits between $5,000 – $24,999.99.

This rate is one of the highest rates available for savings accounts, and it is even higher than the rates of all 1 year certificates of deposit.
In Iowa City, the highest 1 year CD around is from Ally Bank at a mere 1.11%. Although this is already seen to be competitive as compared to the national average of 0.39%. Other institutions that can offer competitive rates are credit unions. One of the highest rates available is from Melrose Credit Union, and even their 1 year share certificate is only at 1.15%.

In order to open a Bonus Savings Account with Leighton State Bank, here’s what you need:

* $2,500 opening balance (account may already be opened with this amount, however the 2.5% rate will only apply to deposits of $5,000 – $24,999.99)
* A primary checking account

One of the things that need to be noticed with this account is that interest is compounded monthly unlike some other institutions that offer to compound daily. Also, balances above $24,999.99 will be subjected to a lower rate of 1.49%. Verifying with a bank official or customer representative may be done to verify this information.

This annual percentage yield has only been available since August 22 as Leighton State Bank celebrates its 100th year anniversary. And there is still no news as to when this promotional rate will be changed. Until that happens, there is still a lot of time left to make arrangements to transfer your cash from your current savings account.

Leighton State Bank is located in Iowa.


How to Pay Off Credit Card Debt

Many of you ended up on this article because you are saying, “I want to pay off my credit cards.  I need to learn to manage my money and get rid of this debt.” Well you are in the right place.  Teaching you some simple steps to clear credit card debt, or at least how to reduce it, is the goal of this article.  Even if you are facing dire situations like bankruptcy hopefully we can show you how to eliminate credit card debt legally and without bankruptcy.

Credit card debt is a problem that has gotten out of hand in America.  Millions of people are faced with the issue of how to pay off credit cards.  The good news is that paying off credit cards is not rocket science.  There are simple things you can do to learn how to get out of credit debt.

Remember the Goal

When trying to pay off credit card bills the goal is not always speed.  Paying off credit cards fast is enticing, but for most of you it probably took a lot of time to get into debt.  We will discuss how to pay off credit cards quickly, but I want to let you know that is not the goal.  The goal is paying off credit cards, whether that takes two weeks or two years, let your mindset not be speed, but credit card debt elimination.

Credit Card Debt Problems

First we are going to look at some problems people face with debt.  The most common problem with high credit card debt is over spending.  Someone racks up high amounts of unpaid credit card bills and owes far more than they feel they can pay.  Often time’s excessive debt leads to the second problem which is not being able to make the monthly payments.  This leads to your credit score being negatively affected and can then lead to credit card debt collection.

Many times the start of the issue is in college when students use their student credit cards to rack up debt, rather than paying with cash or paying off their monthly bill.  People are still paying for a taco they bought 15 years ago.  They never learned how to manage their financial situation and the snowball effect takes hold.  Before long the debt load seems too much to handle and drastic measures need to be taken.

Credit Card Debt Solutions

There is no ‘best way to pay off credit cards’.  Everyone has a different situation which means there are different solutions for getting rid of your debt.   Here are some solutions to consider.

Start from the Bottom

If you make the minimum payments on your credit cards you may never erase your credit card debt.  The start from the bottom method starts with the card with the lowest balance.  Start applying extra principle payments until it is paid off.  Now take the minimum payment from that card, plus the extra principle you were paying and apply all that extra money to the next smallest card.  Repeat the process once the second card is paid off.  Now you can add that minimum payment to what you were already paying.  Each time you reach a credit card payoff you have more money to apply to the next card and you spend nothing more each month.  This method has helped thousands of people pay down their debt. The major key to this method is the credit card user must stop overspending and stop using their credit cards.

Start from the top

This strategy follows the same concept as the start from the bottom method, but instead of focusing on the low balance cards first you focus on the cards with the highest interest rates.  If you lower your credit card debt starting with the highest interest you will save more money in interest payments sooner.  Once you pay off the highest interest card, move onto the next card using the payment from the first card you paid off as extra principle.

Credit Card Debt Reduction

Both of these strategies will help you pay down your balances with the least amount of extra money spent each month.  They may take some time, but the more time you put into these methods the faster they will start snowballing and soon you will reduce your credit card debt to zero.

Credit Card Debt Consolidation

A debt consolidation program is a process in which you use one card or loan to pay off the rest of your cards.  You will take all the credit cards you have and consolidate them into one.  If you have high interest on your debt, then a consolidation to a lower interest rate could save you money.

If you decide to consolidate your credit card debt there are a few things you should be wary of.  If you continue your bad credit card habits a consolidation will only make things worse.  The best practice is to never use the credit cards you paid off again.  It is also wise to reapply any money you save monthly back into the principle of the new consolidated debt in order to pay it off sooner.

You can do free debt consolidation on your own, or if you feel you need assistants there are consolidation services you can use.

0% Interest Balance Transfers

If your credit score is not trashed, then you might qualify for a 0% balance transfer from one of your credit card companies.  Usually these balance offers last between 6 months to 21 months and can save you hundreds, if not thousands of dollars in interest alone.  This is a better way of consolidating your own debt without using a debt consolidation company and will also save you money on their fees.  The card company you go with will most likely charge you a minimum of 3% of the total balance transferred.

For instance, if you wanted to consolidate $20,000 in debt from 3 credit cards into 1, you would write each credit card company a check for the full amount owed. These checks are usually sent with the credit card offer or you can also send payments over the Internet.  Once the payment is received and the debt transferred to your new 0% interest credit card, you will be charged the 3% fee. This fee would equal $600, on $20,000 of debt, but the interest you will save over 21 months can be thousands of dollars.

Your plan for the next 21 months (or however long your 0% interest transfer last), is to pay off as much of your debt as possible. Since all of your payments are going straight to the principle amount, it might be enticing to keep using your other credit cards.  This is where many people fail and only dig themselves deeper into debt.  If you are serious about paying off your debts, then you need to get rid of the rest of your cards.

Negotiating Credit Card Debt 

What if you are in a situation that you are unable to even make your minimum payments?  There are still solutions for you.  One solution is to negotiate your credit card debt to see your balances reduced.  Negotiations are done through a debt settlement company. Negotiating your debt should never be your first option.  Here is a good list to see if this process is right for you.

  • Are you unable to make your payments for at least 3 months?
  • Did you lose your job and have little to no income?
  • Have you had a medical emergency?
  • Are your creditors threatening you with a lawsuit?
  • Is a collection agency harassing you?
  • Will paying off debt slowly or consolidation not work for you?
  • Are you ready to file bankruptcy?

Before a settlement company will start the credit card negotiations they will determine if you need help paying off your credit cards.  You can set up a counseling session with them, and many companies offer this session for free in hopes you will choose them for their services.

Here are a few steps of the debt reduction/settlement process you can expect.

  1. Prepare a budget with the credit card help company.
  2. Determine the length of the program.  Usually debt settlements can last 2-4 years in order to accumulate savings for debt payoff.
  3. Stop making payments and start saving money. A trust/bank account will be set up and the money used to pay the creditors will be saved for the debt payoff at the end.
  4. Now the settlement company will handle all calls and contact by the creditor or collections agency.
  5. Finally, with your approval, a settlement will be made and the debt paid off.

Credit card debt settlements will negatively affect your credit because of missing the monthly payments.  Also the amount of debt you do not pay off will be considered taxable income by the government.  (Example: If you owed $10,000 and settled on $5,000, the difference of $5,000 will be taxed.)

Closing

Remember the main goal is getting out of debt.  The second goal should be staying out of debt.  Building new habits with credit cards is vital.  Each of these situations could escalate your credit card problem if you do not change the way you use credit cards.  Get out the scissors and good luck.


Forgive Student Loans: A Way To Improve The Economy?

With the economy at a slump, the government is continually trying to figure out ways to improve the situation. 2 years ago, a man called Robert Applebaum has come up with an innovative idea that has since then been gaining popularity. His idea is this: forgive student loans. This idea is stemmed on the notion that student loans are one of the heaviest factors that can cut on a employee’s budget. If these loans were eliminated, then the average Joe would have more to spend, thus helping to improve the condition of the economy altogether.

Applebaum’s idea can be found in MoveOn.org which is currently hosting a petition to eliminate student debt, with the goal that once the petition reaches 30,000 signatures, it will then be forwarded to President Obama and the Congress. As of September 15th, the petition has already reached 27,629 signatures.

Apparently, Applebaum isn’t alone with his belief. Aside from the 27,000 people who signed the petition, Congressman Hansen Clarke has also adopted the idea by the formulation of the bill H. RES. 365. This bill endeavors to eliminate personal finance burdens of Americans by not only forgiving student loans, but as well as mortgages and other forms of personal loans. According to Representative Clarke, “We need to cut, cap, and forgive student loan debt,that is the true debt that is burdening American families. We cut student loan debt we’ll have a freer more prosperous country.” Loan forgiveness however is limited to loans which were disbursed within a certain time frame.

The Student Loan Forgiveness action has been considered to be idealistic by some and may be an unlikely way to stimulate the economy. However, if you personally believe and support this idea, you may choose to let your voice be heard by signing the petition in MoveOn.org or in SignOn.org. Who knows, President Obama just might take out that pen.


Mortgage Capital Associates Offer Nation’s Best Mortgage Rates

Mortgage rates are already at an all time low with the economy bringing the housing market down. This makes it the best time for home buyers and refinancers to avail of extremely low rates. Despite the nationwide decrease in housing loan rates, consumers should still be on the lookout for the best deals available.

Today, one of the nation’s best mortgage rates are being offered by Mortgage Capital Associates. Currently, they are offering a 3.875% rate on a 30-year fixed loan which is incredibly low as compared to the national average of 4.29%. Other rates from Mortgage Capital Associates is 3.250% for a 15 year mortgage and 2.75% for a 5/1 ARM.

Mortgage Capital Associates have been in business for 25 years and is one of the nation’s top 200 lenders. MCA has also been one of the first few lenders who used the Internet as a way of marketing the firm. They made it easy for consumers research mortgage rates and get the assistance that they needed. Today, MCA lives up to its mission by providing a quick quote feature on their website where only minimal information is needed for a quote to be obtained.

One of the best things about Mortgage Capital Associates is that it is currently operating and licensed in 38 states within America making themselves more available to their consumers.

To top it all off, it is possibly to apply for a loan online by simply filling up their online form. They also provide a number wherein you can call them anytime and they will have a customer representative assist you.

Mortgage Capital Associates surely beats other mortgage lenders in terms of rates. It also offers the usual online services that bigger lenders are offering. However, it is always best to keep researching for the right lender who can help make the loan or refinance process easy for you. Just make sure not to look too long since the current mortgage rates make it ideal to lock in now.


Aurora Bank CD Rates Review Delaware

Aurora Bank is currently holding the top position when it comes to 6 month CD’s. With a 1.00% APY, it has beaten the usual top contender which is AloStar Bank of Commerce which is at 0.90%. Aside from that, it also gives the highest rate for 24 month or 2 year CDs, making it a great place to safely invest your money.

Aurora Bank also offers other CD terms that offer competitive rates. With the current status of the economy, more and more investors are looking towards certificates of deposits as a safe haven for their money. Although these investors are more focused on capital preservation rather than growth, placing their money in the highest earning CD will allow them to hit two birds in one stone.

Other CD Rates from Aurora Bank are as follows:

6 month CD – 1.00% APY (Highest of all 6 month CDs)
12 month CD – 1.160% APY
18 months CD – 1.240% APY
24 month CD – 1.350% APY (Highest of all 2 year CDs)
36 month CD – 1.570% APY
48 month CD – 1.780% APY
60 month CD – 2.100% APY

Aside from attaining the top spot for 6 month and 2 year CDs, Aurora Bank is also doing fairly well when it comes to the other CD rates. The current top contender for 1 year CD’s is Sallie Mae at 1.20%, which shows that Aurora Bank’s rate isn’t too far behind.

The top contender for 5 year CD’s is First Internet Bank of Indiana at 2.20%. Although Aurora Bank’s rate is relatively lower, it is still much higher than the national average which is going at 1.31%.

Aurora Bank has its headquarters in Wilmington, Delaware and has been in business for 85 years. Today, it delivers its service to over 320,000 customers. Aside from CD rates, they also offer a wide range of banking services from personal needs to business affairs. The bank is also a member of the Federal Home Loan Bank System and deposits are insured to the maximum amount allowed by the FDIC.


The 10 Unbreakable Laws of Money

One of the most popular wealth books today is The Secret. This book focuses on the Law of Attraction and how it is essential in gaining more wealth. However, there are some other universal laws of money aside from this. It is said that once these laws are known and abided, people will be on their way to great wealth. Below are the 10 Laws of Money:

1. Law of Attraction – This law states that whatever you constantly think about, will eventually become your reality. If you keep thinking about the mountain of debt you have to pay off, eventually you will find more and more debt coming your way. On the other hand, if you keep thinking of yourself as a money magnet, chances are you will find unexpected cash finding its way to you.

2.Law of Tithing – The Bible specifically said to give back 10% to God. Tithing is returning a portion back to the universe as a way of acknowledging what it has given to you.

3. Law of Giving - The principle behind this law is that the more money you give, the more will return to you.

4. Law of Polarity – The law of polarity brings to light the two sides of the coin. It states that it is impossible for us to appreciate the good things if we are not exposed to the bad things.

5. Law of Forgiveness – This law encourages a forgiving nature, giving peace of mind and attracting positive energies.

6. Law of Gestation - There is a time of sowing and a time of reaping. The things that we want may not manifest themselves immediately before us. However, this does not mean that it is not on its way. Perseverance and patience will ultimately reap its rewards in the long run.

7. Law of Abundance – Some people worry about not having enough money when in fact money is in abundance all over the world. When you think about gaining money, the opportunity is limitless.

8. Law of Rhythm – Those who end up losing their money don’t learn how to set aside for those moments when money will seemingly “evade” you. In fact, it is just on it’s way. That’s why it’s important to plan ahead for these times. The law of rhythm states that there will be times of ups and downs. It’s just a matter of being ready when the down times come.

9. Law of Cause and Effect - This law states that whatever you give, will also return to you. If you swindle your way to money, eventually you will lose it all as well.

10. Law of Circulation – Energy that keeps flowing is said to be positive energy while energy that is hindered turns into negative energy. Just like money, if it is kept in places where it cannot grow, this will eventually turn negative and hinder you from gaining more. This is why it is essential to keep money in circulation, not just by spending but by investing.


Consumers Face Weakened Banking Power

For seven months prior to the release of the August Credit Power Index, a system that tracks the banking power of consumers by measuring the difference between loan rates and deposit rates compiled by the money management information source MainStreet and the financial industry data expert RateWatch, interest rates on CD were showing slight but consistent improvement.

However, the latest Credit Power Index data reveals a reverse in the trend. Meaning when the index goes up, it means that the interest consumers are paying on loans is significantly higher than the interest rate they are receiving on deposits.

“The national Credit Power Index may have hit bottom last month,” says the general manager of RateWatch, Rachelle Zorn. Her statement suggests that an end to the great consumer environment at banks may be close at hand.

However, the notion of what makes a “great environment” is entirely relative, as interest rates on savings products such as CD’s have been dismal for quite some time.

The current sorry interest situation can be blamed upon the government. “The low Fed funds rate is the real driver here,” says Maria Cappellano, a portfolio manager at investment management firm Eaton Vance who focuses on short term instruments, according to Main Street.

“It’s really an anchor for short-term CDs and deposits.”

Despite the fact that any return investor can expect to receive upon such CD’s and deposits are drowning, many Americans are choosing to take the safer route of wealth preservation over the riskier and much more precarious path of growth investing. What this means is that much of people’s money will continue to be shuttled into these rather unappealing but secure instruments.

“Do I want to have my money in prime money market funds with exposure to the European debt crisis? Or should I put my money in an FDIC-insured CD at the local bank?” Cappellano proposes that investors are asking themselves, as per Main Street’s reporting. “The mindset of consumers is that they’re looking for this cash to be safe, and they’re mostly concerned with capital preservation than an income base.”

The only bright side is for people looking to borrow money because, should they qualify, they could get a great rate on a loan at the moment.

Despite the grim return money put into savings accounts and Certificates of Deposit these days, it is important that consumers don’t abandon setting some money aside in order to establish an emergency fund.


Easy Membership, Open to All Credit Unions

Because of economic instability, investors are looking for safer places to park their money so as not to lose their capital. CD rates are quite low, but despite this, it is still considered to be very safe which is why investors are searching for the highest CD rates available.

Although some banks offer competitive rates, the highest CD rates as of the past month comes from credit unions. Unfortunately, some credit unions are limited in membership due to several factors such as geographical location, community, and occupation. However, there are some credit unions that are what they call “open to all”.

One of the most popular open to all credit unions is Melrose Credit Union. It also gives some of the highest rates available. However, Melrose isn’t the only open to all credit union out there. Below are some of your possible choices:

1. Self Help Credit Union – Membership for this credit union is open for all those who join the Center for Community Self Help or CCSH. To become a member, all you have to do is pay a one-time fee of $20. An additional $5 is also needed to maintain an account. For a total of only $25 you can already open an account and enjoy the rates of SHCU.

2. America’s Credit Union - Although this credit union’s membership is for the Armed forces, civilian personnel and relatives of members, a person can also qualify for membership by simply joining the Association of the United States Army or AUSA. Only a one-time fee of $33 is required.

3. America’s Christian Credit Union – Although the membership for this credit union is limited to a certain belief, many American’s are Christians. Membership is automatic upon signing a document that represents your statement of faith or service.

4. Patelco Credit Union – In order to join this credit union, you have to become a member of the California Association for Older Americans. This CU however is not insured by the NCUA which is the counterpart of FDIC for banks. It is however, privately insured.

There are more open to all credit unions out there. Just be sure to ask and don’t immediately believe if they say credit unions are not for the general public.

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