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Archive for Personal Finance – Page 4

Should Your Teen Have A Credit Card?

By BankAim · Comments (0)
Monday, April 4th, 2011

With the rising phenomenon of high school and college students deep in credit card debt, the question for each parent is, “should my teen have a credit card?” Surveys show that college freshmen have an average of $1,585 in credit card debt. This amount is certainly no joke.

One college student shares her experience of how she feels strangled by debt, wishing she could just pay everything off. With three jobs and bills to pay, it’s hard to believe she’s only 19 years old.

There are always two sides to a coin, and while some parents believe that giving your child a credit card will teach them financial responsibility, others argue that they’re just not ready for it. Janet Bodnar, author of “Raising Money Smart Kids: What They Need to Know About Money And How To Tell Them”, explains that credit is not real money to teens. “It’s a license to spend, and they’re not learning how to manage money on their own.” Because of the rising statistics of teens in debt, it’s an opinion that’s well worth considering.

So how do you prepare your teen for financial responsibility? There are a couple of steps you can take before going out to the big leagues.

1. Financial education – This is where everything starts. Educate your teen about money and allow their minds to be opened about wise investing, budgeting, and even mind setting. Expose them to different kinds of media such as financial books, audio-visuals, and even seminars. One day, they will thank you for it.

2. Start with a prepaid debit card – A debit card for your teen is a smarter choice than a credit card. This gives you some degree of control since their spending will have a limit. Strike a deal with your teen such as having a set amount that should last for the month. Be strict about your rules and let them know that when they’re on their own, there won’t be anyone to give them more cash when they run out.

3. Move on to a checking and savings account with debit card – When your teen gets his first part-time job, he’ll be having money that goes straight into his account. Having these accounts will allow him and you to monitor the spending through the monthly statements. Over withdrawing can be subject to penalty, and this is a responsibility your teen will have to face. Then again, a penalty is better than a steep credit card debt.

4. Finally, the credit card – Get them a card that has a limit to the amount of debt it can incur. Be sure to discuss the monthly statements when they start arriving, but focus on how your teen is able to pay the bills off monthly. Ask questions such as “what made them charge the purchase rather than using cash?” and “have they bought anything unnecessary just because they have extra credit?”

When introducing credit cards to your teens, the most important aspect will always be financial education and maturity. Once they understand the weight of possibly getting into debt, and how they can manage their finances better, the more control they will have. Be open to your teen, and if credit cards aren’t necessary yet, there’s no need to give them one. No rush.

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Deciphering Your Credit Report

By BankAim · Comments (0)
Tuesday, March 29th, 2011

It’s advisable to check your credit report at least once a year to gain an understanding of how your credit score appears to your creditors. The thing is, when we do check our reports, we have trouble making sense of it. So how do you read a credit report?

There are four main parts to a credit report. Your personal profile, credit history, public records and inquiries. Read over each section of the report and scan it for errors.

1. Personal Profile – Your personal profile contains all your basic information such as your name, address, birth date, social security numbers, and previous addresses and employers. Misspelling of your name can be common when creditors record your name wrong. However, it is important to check if there is any discrepancy in address as this can alert you of a possible identity theft.

2. Credit History – This is where you can find an itemized list of your current and past accounts, including balances and arrears. You will find the name of the creditor and account number for each bill. There will also be a column that identifies the nature of the account such as individual, joint, authorized user, terminated, and others. Other information such as the history of the account may also be seen.

This part of the report will show whether you have a high credit limit and it also indicates the number of installments you have left for any loan. The balance remaining on the account, any due amounts, and the status of accounts will be noted.

Creditors will also check whether you have more revolving accounts than installment accounts. Revolving accounts is one wherein there is no fixed ending date to the debt. Installment accounts are when there are fixed payment and a specific ending date. Revolving debts are less attractive to creditors and will not help build your credit.

3. Public Records – This report contains records that will also be seen in local, state and federal courts. This shows whether you have declared bankruptcy, have tax liens and other monetary cases. Even overdue child support records may be included. Public records will remain with your credit score for seven to ten years and can be a negative blow against your credit score.

4. Inquiry – Inquiries are classified between hard or soft. Hard inquiries are those initiated by you, while soft inquiries may come from companies that wish to offer promotions on credit and current creditors that are monitoring your account. It is generally not advisable to have too many creditors view your credit report as the frequency of inquiries can appear as a negative to some lenders.

Finally, your credit score may be seen in your report. This score will determine whether an individual will qualify for a loan or not. High credit scores will mean better rates for the borrower, while lower rates can also leave the borrower subject to loan denial. Credit scores can range from 300 to 850.

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Categories : Credit Cards, Personal Finance
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The Fastest Way To Eliminate Multiple Credit Card Debt

By BankAim · Comments (0)
Friday, March 25th, 2011

According to a poll from usnews.com, 70% of American consumers are in debt. The question is, are you one of them?

Many consumers are now deep in debt, with not just one credit card, but with multiple credit lines. The sheer weight of it all are getting debt ridden credit card holders seeing doom as they struggle to keep up with monthly minimum payments. If you’re feeling hopeless about your debt, there’s still a way out of it.

The fastest way out of multiple credit card debt is by setting up a system. Call it whatever you like, but this system definitely works for everyone. Here’s what you need to do:

1. Set aside a certain amount of money to pay off the minimum balance of each credit card debt. If you can set aside more, then that would be better.

2. Check each debt you have and write down the amount due, and the minimum amount required.

3. Once you have your list, go through each one and calculate the loan that has the least Debt Cash Strain Factor (DF).

4. You can calculate the DF by dividing loan balance over the minimum payment (Loan balance / minimum payment)

5. The debt that has the lowest number is the one you should pay off first. Let’s call it “Debt #1”.

6. Pool all of the money you have set aside for the minimum payments of your credit card debts and pay it all to debt #1. Don’t worry about not paying your other credit card debts, you will get back to them sooner than you think.

7. Since you have paid off more of debt #1, this will make your monthly interest payments lower and you will quickly be able to pay it all off.

8. After paying off debt #1 completely, use the same amount of money (or more) you set aside every month to pay off debt #2.

9. Repeat the process until you pay off all of your debts.

Paying off only the minimum balance will take you forever to get rid of that debt. This is because you’re only paying the interest and not putting anything in the principal. With this system, you’ll be paying off the principal with each loan you decide to pay off first, ridding you of the loan burden one by one.

And if you’re really deep into financial trouble and you’re not able to shell out the money needed for minimum payments, that’s the time when you need to make significant lifestyle changes such as cutting down on expenses.

One thing to remember with ridding yourself of debt is to set up a system, and forget about it. Leaving your mind open to positive influences and a money generating mindset.

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Top 7 Tips On How To Choose The Right Bank

By BankAim · Comments (0)
Friday, March 18th, 2011

Banks are in the business of making money out of your money. Whenever a depositor puts cash in his account, banks invest this in other vehicles and give the depositor back a small portion of the earnings. With the tiny amount of interest banks are giving out for savings accounts, it’s only natural that we demand the best service.

Banks are sprouting out all over America, and with the accessibility of online banking, it’s getting harder to do due diligence with all of these banks. So how do we choose the right bank? Here are the top 7 things to look for when choosing a bank:

1. FDIC Insurance – Banks can close. This has become evident during the financial crisis when in 2008, twenty-five banks were shut down and taken over by the Federal Deposit Insurance Corporation. Banks that are FDIC insured can guarantee every account up to $250,000. If your bank closes, at least you know you’ll be getting your money back and it won’t be lost in the wind.

2. Low To None Minimum Requirements – Having low to none minimum requirements can be especially useful for ATMS. This means that even if you’re hard on cash, you can withdraw as much as you need without fear of being charged extra for going below the minimum requirement.

3. High Return on Investment – Look for a bank that gives high CD rates, checking account and savings account rates. Usually, local and smaller banks give bigger rates since they are still trying to get depositors to invest with them. If you’re looking for growth of your money, check your local banks.

4. Low Loan Rates – Availing of loans can be advantageous whether you’re using it to buy a new home or car, or if you’re using it as leverage for your business. Whatever the case may be, having loan rates at rock bottom would always be the best scenario. Check with your bank on interest rates on loans, their terms, and their flexibility.

5. Online banking – The world is fast changing and banking is keeping up with the change. Gone are the days when everyone had to go to the bank branches to deposit. Banking can now be done online or through mobile. Make sure your bank has these features, and also be sure to check on the reliability of their online security.

6. Numerous ATMS – Most banks charge a fee if you withdraw from another bank’s ATM. Having accessible ATMS of your bank can save you a lot of money in ATM charges.

7. Customer Service – The best way to know a bank is to ask its personnel. Bank staff and managers are key in finding out special promotions, inside information on foreclosures, and techniques to get the most out of your money. Also, time is money. If you’re in a rush and you need to close a deal or get quick cash, having excellent customer service will save you the headache.

Don’t slack off in choosing the right bank. Once you’ve opened an account with one, it’s a chore to transfer to another when you’ve realized that bank is not for you. Money is essential to all of us, and it’s only right that we spend some time to double check.

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What To Do When Facing Foreclosure

By BankAim · Comments (0)
Friday, March 11th, 2011

Foreclosure is one event which all of us dread to happen. This could signify one of the lowest points that people can have in their lives. Facing foreclosure is a terrible experience. Waking up every morning with a feeling of impending doom as you know that the house you have lived in for years could be taken away from you.

Don’t let foreclosure mark the end of your world. In trying times like these, it’s important to man up and do what you can to salvage what’s left. When facing foreclosure here’s what you should do:

1. Face your financials – Instead of going around blind about your financial status, what you should do is find out just how deep you are in debt. Make a list of the payments you’ve missed, and a list of the payments you still owe until the payment term is over. This will give you an idea of how much you need to raise in the next few years. You could also take advantage of mortgage calculators to gain a better understanding of your finances.

2. Talk to your lender – Don’t be afraid of showing your face to your bank or your private lender. You’ll be surprised to find that banks will be willing to help you find options to work around your situation. Perhaps they can give you a longer term. Banks generally don’t like foreclosed properties since these will be non-moving assets for them.

3. Consider getting help – There are credit counseling services that can help you evaluate your options. Agencies linked with the Association of Independent Consumer Credit Counseling or National Foundation for Credit Counseling can give you a hand. If you’re comfortable with the idea, you may also approach relatives who will be able to give you a loan on easy interest rates. Just make sure to pay them on time, and put your loan in writing.

4. Perhaps Refinance – If you’ve already got equity on your home, and your lender hasn’t filed a notice of default, you might still be able to refinance your home. Refinancing will give you lower interest rates and lower monthly payments that you just might be able to afford. Be careful about loan options such as the interest only mortgage and adjustable rates. These might just get you in a deep hole sometime in the future.

5. Be realistic – Most of us are too tied to our homes. However, when the situation calls for it, it’s time to let go of emotional attachments and face the reality that it may be better for you to let go of the property and sell. There are real estate professionals and investors who are looking for foreclosure deals they can buy to make a profit. You could consider selling your house to them, or you could partner with them and discuss how you can turn your situation around to your advantage. Real estate professionals are experienced when it comes to foreclosures and they just might be the ones to give you the best option.

Nobody wants to have their home in foreclosure. Before you get to that point, get your finances in order and seek professional help as to what are your best options. There is definitely a way out to that sticky situation, and you just might get a good start to rebuilding your future.

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What Posting on Facebook Could Mean to your Money

By BankAim · Comments (0)
Wednesday, February 16th, 2011

Social networking sites are the new wave of the generation. People are crazy about them. And they have a lot of reason to be. Social networking sites, Facebook especially, have revolutionized the way people across the globe communicate. Making it easy to connect with friends and business connections you otherwise would not have gained contact with. However, Facebook is not all fun and games. It could be a breeding ground for financial disaster.

Identity thieves feast on personal information such as your full name, birth date, birth place, email address and even your pet’s name. It only takes a few of these information to hack into your personal accounts. And with the advent of online banking, these information could just be the thing identity thieves need to make a run for your money.

Identity thieves are smart. They can get one little detail from you and connect it with another. Although it may seem harmless to post a picture of your favorite dog and place a caption of just how much you think Fifi looks cute in this picture, that little piece of information could be the answer to the security question banks and other financial institutions ask you when you forget your password. The thing is, when you post too much information on Facebook, even a high school student can go ahead and hack (and possibly drain)  your account.

Here are some things you can do to protect yourself from identity thieves in Facebook:

  • Do not place critical personal information such as birth date, birth place and your full address. These information can be critical to identity thieves.
  • Do not place contact information such as your home phone number, cellphone, and  email address
  • Do not post your daily whereabouts. You’re making it doubly easy for stalkers to find you. Instead of posting where and when your hot weekend party will be held and how excited you are, post the details after the event. That is, if you really need to do so.
  • Do not add everyone up as your friend. When Facebook and other social networking sites are concerned, you shouldn’t be overly friendly. Only add friends that you know personally, not friends of friends or someone you just met at the local grocery store or at the bar.
  • Be careful when answering seemingly harmless quizzes such as “10 Things Other People Wouldn’t Know About You”, this could have been made specifically to gather personal information.

Although social networking sites pose a threat to your identity, they are changing the way the world communicates and it’s always better to have one than none at all. You just have to be vigilant about the information you’re disclosing, especially if these information could be clues for identity thieves to gain access to your email, your SSS number, and even your personal bank account.

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Why you Should Start Saving for Retirement Now – Even When You’re 20

By BankAim · Comments (0)
Thursday, February 3rd, 2011

When you’re in your 20’s, it feels like the world is at your feet. You’re single, you have a regular job (and sometimes even high paying, if you’re smart), and you have a lot of cash to burn. It only seems natural to go ahead and get that car loan, rent a classier apartment, spend your dollars on shopping or vacations, and live a financially carefree life.

You tend to think, “I’m still young, I have loads of time to start saving”. But before you know it, you’re at your 40’s or even 50’s, with a never-ending house loan, and kid’s college to think about. You look at your account and sweat starts pouring down your forehead. With only 10 more years to start saving for retirement, the future is starting to look bleak.

Before you find yourself in this tight situation, it’s time to use that brain of yours and realize the importance of saving for retirement now. Do you know that the best time to start saving is when you’re at your 20’s? And if you only could, you should’ve even started saving when you were 10!

And this isn’t only because of the length of years you have until you turn 60, but this is because of the power of compounded interest. If you haven’t heard of the term before, compounded interest happens when interest is added to the principal, and as time wears on, the interest gained will also earn interest.

To illustrate this concept, let’s say you put $1,000 in the bank with 20% annual interest. By the end of year one, your money would have earned $200, for a total of $1,200. By the end of year two, your money (which is now $1,200), will earn another 20%, earning you a total of $1,440.

If you’ve made the connection, the more number of years you keep your money where it earns a steady percentage of interest, the more money you get!

Let me drive home this point. If you started saving that $1,000 at age 50, by age 60, you would get $6,191.73. But if you started saving that $1,000 at age 40, by age 60 you would have.. (drum roll please).. $38,337.43. Shocking difference? Try calculating if you saved that $1,000 at age 20. You would probably faint.

When people advise you to start saving when you’re young, it’s not for naught. And aside from saving young, you also have to know where to put your money to get the best interest rates. Whatever happens, don’t put off saving for your retirement. Or else there will be nothing left for you but regret.

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Clearing Debt the Sensible Way

By BankAim · Comments (0)
Thursday, December 2nd, 2010

The economic crisis by now has impacted everyone and the majority of people have way too much debt. While it will take some time to clear all this debt, there are ways to reduce what the debt is costing you.

If you are really interested to clear debt as soon as possible then you may just want to follow these tips to reduce the costs. You may be on your way to that perfect credit score rating sooner than you think.

First you must assess all of your debt to see which is costing you the most. It would seem obvious that the debts incurring the highest rate of interest are the ones you should try to reduce the fastest. Often this is credit card debt, which is usually closely followed by debt on that new flat screen TV or nice lounge suite. Analyze your credit card bill and your other loans.  Ascertain which one is costing the most in monthly interest and work at trying to pay that off quicker.

If you are not in a position to make additional payments on any debts, there are ways to still reduce what you owe. Instead of a lot of small debts you should look to consolidate them into one debt. It may seem obvious, but in their desperation to clear their debt, many people look past the obvious; ensure that the cost of the consolidated debt is not more than the total of all the small individual ones. If it is then consolidate only the ones at a higher rate into the debt consolidation loan and leave the others.

Although it is nice to think of the lower payment each month, this should not be the only factor to consider. Take into account the remaining period on your individual debts. Even if a debt is at a higher interest rate, it makes little sense to reduce the interest by 2% into a 36 month consolidated loan when there is only 6 months left on it right now. Rather leave that out of the debt consolidation and use the money saved on the other debts to try settling that one even quicker.

Remember that there is a cost involved in consolidating your debt – there are fees involved in the new loan and there are often penalty fees for settling existing loans early without giving 90 days notice. Take this into  account when calculating any potential savings. The cost of the debt is not only in the payment, although that will be the major factor in terms of affordability – a loan at 12% over 12 months will cost you more in interest than a similar loan at 10% over 36 months, for example. Always look at the total interest you are paying, not just the nominal rate.

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Deposit Checks with Your iPhone or Android Camera

By BankAim · Comments (0)
Wednesday, November 17th, 2010

Earlier this year Chase Bank updated their mobile app to include some pretty cool features.

As of now the application is only available on the iPhone, but look for it to be released on the Android market in early December.

There are two new features that make this app a must have for Chase customers.

[See the iPod Checking Account Promotions}

1. Deposit Checks with Your Camera.

Instead of driving to the bank to deposit your check now all you need to do is take a picture of the front and back of the check press send and your funds will be deposited. The app makes an attempt to recognize the routing number and account information on the check from the picture.  If the information is unreadable to the camera you can manually input the numbers.  The funds will remain as pending until Chase processes the transaction.

If you want to use this feature you will have to enroll in Chase Quick Deposit which is a free service, just like the app itself is free.

2. Send money quickly and securely.

If you sign up for the free Chase QuickPay service, which is similar to Paypal, you will be able to send funds with your phone to other people with as little information as just an email address.  Neither the sender nor the receiver of the funds will be charged and the recipient  does not need to be a Chase customer.

More info regarding the Android Release

Reportedly the Android version of the app is completed and is supposed to be released onto the Android market next month. The guys at Phandroid apparently caught wind of an internal email that went out to most Chase employees stating…

Nov 15 2010

“GET READY FOR NEW ANDROID APP!

A new Chase Mobile application will be available for users in early December! This new application will allow Android users to access accounts, pay bills, transfer funds, send wires, make mobile Quick Deposits and locate Chase Branches or ATMs. However, customers will not be able to make QuickPay payments with the new application at this time.”

Looks like Android will be minus the QuickPay option at this point, but none the less this great banking app will be released to just about everyone now.

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How to Absolutely ROCK Black Friday

By BankAim · Comments (8)
Wednesday, November 17th, 2010

OH the glory and wonder of Black Friday!

When people are willing to wake up at the crack of ungodliness, camp in 0 degree whether, trample a neighbor to death all in the name of stuff. (Not to mention its on a holiday weekend when you can sleep in, whats up with that? I said, whats up with that?)

But for those of you who just cannot get enough of Black Friday and all its magnificence I have compiled two killer lists on how to Rock Black Friday and how to ABSOLUTELY rock Black Friday.

How to Rock Black Friday List:

  1. Plan Ahead - Do not just shoot from the hip and head out Friday Morning. You need a Plan. If you fail to have a plan then you plan to have a fail. (That statement really doesn’t make sense. :) )
  2. Research - Determine what you want and look into the stores that have what you want. Plan on visiting those stores first… first and early (and by early I mean just don’t even sleep the night before).
  3. Get some sleep – I know, I know… It sounds contradicting to the end of #2 but its not.  Store up as much sleep as you can in preparation because the best deals are found EARLY and the best Black Friday-ers do not sleep at all… (see no contradiction).
  4. Set a budget - You can get trapped in all the wondrous deals real fast. Soon you will have spent more money than you have on tons of extra stuff you don’t need. Set a budget and spend no more than that.
  5. Post BF attack plan – Most deals are the send in for a rebate type deals, so FB (Facebook) your BFF’s (Black Friday Friends) to a PBFP (Post Black Friday Party), get all those rebates filled out then have a parade down to the post office and send them away.

Mission Accomplished.

Now How to ABSOLUTELY Rock Black Friday:

  1. On Friday morning.  Sleep until lunch.  Wake up and have a huge left over turkey sandwich.  Head back to your bedroom, take a nap and wake up just in time to watch football or the Mythbusters Thanksgiving weekend marathon.

Now we are talking.

This article is part of the Go Banking Rates “Holidays and Money” writing project, an on-going project that encourages creative writing in the PF blog community, centralized around a single broad-reaching subject.

If you enjoyed my article, VOTE for it here as Readers’ Choice Favorite!

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