By CCRB in Credit on November 20 2008
What the Financial Crisis Taught Me
The great thing about life is that we get to learn from our mistakes. We can learn from the mistakes of others or learn from our own mistakes. Either way, there is a great deal to learn.
Millions of people around the country are beginning to look back and say, “…” Some people are wishing that they would have started a savings account, done better expense tracking or retirement account while they still had a job. Other people are wishing that they hadn’t put so much debt into their home. There is a great deal to learn from the recent financial crisis.
1. It’s not all about investing. Americans, in general, got out of the habit of savings and into the habit of making an investment instead. For almost three decades, we saw better returns coming from the stock than we did at the bank. Instead of putting a reasonable amount of money aside for a rainy day, people bought stocks instead. Financial freedom isn’t all about investing.
2. Less is more. When I was dancing, my teacher would always say, “Less is more girls.” She was trying to get us to realize that it took less force to land a triple pirouette. This adage can be used in the financial realm as well. When it comes to investing, less is more. Simplistic investment strategies will get you farther ahead than complex ones.
3. Believe that you may be wrong. Believe it or not, you aren’t right 100 percent of the time. Unfortunately, there are people that believe that they are right 150 percent of the time. This mentality is all wrong in the financial realm. The most important thing you can do to stay on top of your investments is to constantly reassess your position and admit that you may have been wrong at one time or another.
4. When it comes to market upswings or downturns, be cautious. If the market starts to slow down, don’t rush out and sell all of your stocks. If the market picks up a bit, don’t buy too much stock. Keep a realistic picture and goal in your mind at all times.
Dealing with financial matters and the stock market can be tricky. If everyone understood these principles the way they should, our country wouldn’t be in such a financial disaster. I guess its time to start getting smarter with my credit cards!
By CCRB in money management on November 19 2008
Financial Lessons from the Wealthy
What defines someone as being wealth? Does it have to do with how much money they have in the bank? Does it have to do with the gross amount of their investments? When you hear the term “millionaire,” do you think it is something that can be easily achieved?
The fact of the matter is that most of us can become millionaires if we put our minds to it. The main reason why many of us aren’t millionaires is because we don’t handle our finances correctly. Take these financial lessons fro the wealthy into consideration if you want to become one of them.
1. More charitable donations. Wealthy people are able to give away more money than the average person. These charitable donations are tax-deductible. Instead of investing all of their money, they give it away. Not only are they paying their success forward, but they can deduct each of these charitable donations.
2. Own businesses. Millionaires are much more likely to own their own business than a non-millionaire. Twelve percent of American households own all or part of a privately held business. The key is own several businesses. Don’t have all of your life savings tied up in one company. Keep your options diversified.
3. Strategically borrow. Wealthy people know how to borrow. They borrow strategically. A recent study showed that the most wealthy 10 percent of the population are 50 percent less likely to have outstanding credit card debt. Figure out how to strategically borrow to become wealthy yourself.
4. Affordable cars. Millionaires and other wealthy individuals are less likely to invest their money in exotic cars. Instead, they put their investments into their home or other investments. Not every wealthy person lives an assuming lifestyle. Cars depreciate in value so they don’t pour their money into it.
5. Homeowners and investment property owners. Most wealthy people own their own home and/or an investment property as well. Homes are a great way to make your money grow. Because of this, wealthy people invest their money into it.
The average American does have the potential to become wealthy or even a millionaire. The key is to learn about money management. Follow these simple methods to becoming more financially savvy.
By CCRB in financial advice on November 18 2008
Your Personal Guide to Banking…In Under 5 Minutes
Banks and other financial institutions make the majority of their profit from those small, little fees they charge you. These fees can really add up. By the end of the year, you’d be surprised to see how much you have ‘paid’ the bank. You can avoid these fees by following this personal guide to banking.
The most important thing to do is to choose the right bank. Most banks are insured by the Federal Deposit Insurance Corporation. Most credit unions are insured by the National Credit Union Association. Make sure that your money will be insured by either of these organizations before choosing a bank.
The next step is opening an account. A checking account is one of the most basic services to choose from. Many checking accounts are available for free without a minimum balance. Choose an account that has low fees. Here are some insider tips to opening the right account.
-Get a detailed description of every type of account. This description should include any monthly fees or penalties.
-Don’t let your account go into overdraft. Overdraft fees are larger than other fees. The fee for writing a non-sufficient-fund check is $30. Avoid one or more of these fees by not going into overdraft.
-Overdraft protection. Choose a bank and account that offers overdraft protection. You can get this service free-of-charge so don’t pay for it.
-Be an informed member or customer. Make sure you know when your deposits will be ready to avoid any overdraft situations. Be aware of any delays that might cause your deposit to take extra time to be available.
Be careful with your debit or credit card. Choose a card with little or no fees. Make sure you don’t incur fees when you use your card at an ATM that is owned by another bank. You’ll get charged by your bank and the other bank. Make sure you won’t get charged an additional fee if you use your card as a debit card.
It’s smart to add a savings account to your primary account. Choose a savings account that has the highest-interest rate. You’re financial institution will pay you for leaving your money in the savings account. You’ll want to make sure you take advantage of this dividend.
There are many things to know when choosing which financial institution to bank with. Choose the bank or credit union with the most convenient services which include: direct deposit, online banking, automatic bill pay, etc. It is also important to choose a bank that has the lowest fees. Here is some financial advice, don’t get caught paying your financial institution any more than you have to.
By CCRB in Loans on November 13 2008
Citigroup The Giant: Is this a good thing or a bad thing?
Citigroup’s chief Chuck Prince warned that things at his bank would get “complicated” if anything fell out of place within the economy. Well, things did fall out of place. So, what does that mean for Citigroup?
In past years, Citigroup fought against other huge bank corporations to be the biggest. How were they competing? Each was trying to see if it could get larger by offering more loans. These loans were issued to risky consumers. Risky consumers equal risky loans. Risky loans ended up attacking smaller banks. What has our economy been left with? Huge banking corporations that are way too big,
Citigroup has tried and failed to join up with smaller banks in effort to boost deposits and make both sides more financially sound. Citigroup hasn’t given up. Instead, it continues to seek for smaller banks to team up with. However, Citigroup has missed the boat. September was the perfect time to join alliances.
The list of ‘cheap’ banks has drastically dwindled. Citigroup is already the third-largest American bank. They want to be bigger and better. Buying several smaller banks won’t work as well as teaming up with a larger-small bank.
Citigroup faces three major challenges.
#1-Economists wonder whether the $25 billion infusion will be enough to get Citigroup out of its slump.
#2-Credit cards losses will continue as the weakened economy tried to rebuild. Credit cards provide 23 percent of Citigroup’s net income.
#3-Citigroup has over $70 billion in risky loans. This makes a shaky and troubled loan portfolio for the banking giant.
If Citigroup wants to stay afloat it needs to seek help from the government. Putting together last-minute acquisitions is not going to solve any of Citigroup’s problems. The bailout plan may be the only way for the company to start rebuilding its portfolio and its reputation.
By CCRB in Credit Cards on November 12 2008
Living On Credit
It is no surprise that the majority of Americans have been living on credit for quite some time. Credit has been a vital resource for the U.S. economy for decades. Has the recent credit crisis caused Americans to think twice about the amount of credit they are living on? Absolutely.
In the past several months, American consumers have stopped buying as many frivolous items and miscellaneous products. Instead, these consumers have started buying more bread, milk and eggs. Isn’t it interesting that a country who depending so heavily on credit cards is now pushing them aside?
Credit cards have been and will continue to be an important part of the U.S. economy. Credit cards used to be used to buy discretionary products. These products include appliances, furniture, electronics, jewelry and more. Recently, credit cards have been used to buy necessities like gas and groceries.
Americans have even paid their credit card bills before they pay their mortgages, car loans, etc. The credit card market has become more important than the housing market. We know this to be true because Americans have placed credit cards at a higher priority than mortgages.
Americans have started to even neglect credit card payments. The total number of credit card delinquencies has increased dramatically in the past few months. It is getting harder and harder for American families to put food on the table. The first thing to ignore has been credit card payments.
Americans have been living on credit for years now. In the past, credit has been used for discretionary purposes. Now, credit is being used to buy necessities. However, the total amount of new credit that is being used has been decreased significantly. The recent credit crisis has caused people to think twice about incurring more debt. It certainly will be interesting to see the new phase in the American economy.
By CCRB in Credit Cards on November 10 2008
Using Credit To Stay Afloat
Recently, there has been a dangerous trend occurring in the United States. Credit counselors started noticing quite awhile ago that people began paying their credit card bills before or instead of paying their mortgages. These people refuse to stop using their credit cards. To these people, credit cards offer their only cash flow.
This dangerous trend has spread nationwide. The trend suggests that, for the most part, borrowers have given up on paying their mortgages. Instead, these people are focused on squeezing by with a little help from credit cards. A year ago, economists predicts that if the trend didn’t reverse itself, it would drag the entire economy down.
Where they right or were they right? The cost of living has gone up. The cost of credit and the availability of credit has gone down. Naturally, more people are living off of credit. Consumers are living off of credit cards more now than ever before. Instead of just using credit cards to pay for discretionary and luxury items, consumers are using plastic to pay for necessities.
America has gotten itself in a nasty cycle. Consumers can’t stop using credit cards because the price of everything has increased. However, it is the excessive use of credit cards that has gotten our economy where it is today.
People are using their credit cards more when they get laid-off or experience any other source of financial difficulty instead of cutting their spending. The current U.S. economy is acting like a peer-pressured teenager. People can’t afford their mortgages. So, what do they do? Ignore the mortgage payment and keep using their credit card to make it appear like everything is going fine. This is not good money management.
Credit cards have become a necessary evil in today’s society. Credit cards are being used to stay afloat financially. In order to get out of this financial crisis, Americans need to get back to the point where we were saving more and spending less.
By CCRB in debt on November 7 2008
Debt Consolidation Before the Holidays
When is the perfect time to consolidate all of your bills? Right NOW, before the Holidays!
Financial experts predict the 2008 Holiday Shopping Season to be one of the worst in America’s history. Wouldn’t it be great to free up some of your money and get rid of the hassle of paying so many creditors at the same time? If you answered ‘Yes, you need to consolidate your bills.
Debt consolidation really takes the hassle out of paying bills. Instead of having to juggle five, six or more due dates, payment amounts, payment terms, etc., you only have to deal with 1 due date and 1 payment amount. Debt consolidation companies take all of your loans and roll them into one easy, convenient and affordable loan. These companies also deal with your creditors so that you don’t have to.
Doesn’t it feel like you are paying your bills but not getting any farther ahead? Debt consolidation companies make sure that you get ahead of your loans. People end up actually paying off their loans when they use a debt consolidation company. Instead of being trapped under a certain amount of debt, debt consolidation programs make it possible for you to get out from under the debt and pay it off much faster.
Debt consolidation programs save you money in the short run and in the long run. Let’s look at a quick example. You might have a $300 car payment, a $200 home equity loan, and a $150 medical bill every month. That means that you are paying $650 every month for these three loans. A debt consolidation company will take these three loans and roll them into one loan. Often times, your interest rate goes down and you have more flexible payment options. Your $650 bill amount might go down to $400 a month if you use the right debt consolidation program.
Now is the perfect time to consolidate your loans. Your credit score will go up and your credit report will improve. You will have the opportunity to meet with financial counselors to discuss your individual financial situation. And, the best part is that you will save money with this budget help right in time to do your holiday shopping.
By CCRB in Cash Back Cards on November 6 2008
Five Great Reasons Your Business Should Have a Credit Card
Many people use personal credit cards as a way to fund the startup of a business. Often, it is the only way many people can get a business started to buy supplies, products or services. Many businesses that used credit cards to start have become very successful while many others have left individuals saddled with tens of thousands of dollars in credit card debt. Although there are pros and cons to using a personal credit card to fund your business, your business should have a credit card regardless of whether you’re starting out or not.
Separating Expenses
Remembering if a charge from several months ago on your personal credit card was in fact for personal or business use may not seem like a big deal. However, this behavior can come back to bite you, courtesy of our friends at the Internal Revenue Service. Using the same credit card for personal and business expenses can give the IRS probability to suspect some expenses were personal in nature when you claimed them as business expenses. If you have separate personal and business checking accounts, there is no reason you should not be doing the same for expenses, and it is a must to be doing expense tracking. If you are audited by the IRS, the burden of proof lies on you, not them. Using a business credit card is an easier way to distinguish expenses for your business.
Tracking Expenses
Keeping track of expenses is one of two key components in knowing if your business is actually making money. Knowing where your business spends its money is also important. Whichever credit card issuer you choose, all the expenses you charge to the credit card are conveniently categorized to see where your business expenses are coming from. Employee cards are also available with a small or no annual fee, giving you control over each employee’s spending limit and giving you an effective way to track their expenses.
Taxes
Tax season comes and you can’t remember where you put all those receipts. You tucked some away here, some away there and some in your wallet or purse. You paid cash for something recently, but can’t remember where and you have no idea where the receipt is - I’ve been there. Using a credit card could have just made your life a lot easier. Your monthly statements can act as an easy way to see most, if not all, of your expenses for the year (the ones you charge anyway). They’ll already be nicely categorized for you and provide an additional source of documentation for business expenses.
Rewards
This is my favorite part of using a business credit card; getting some kind of reward on every purchase the business makes. You can choose a credit card that earns cash back rewards, airline miles or travel points, gift certificates, merchandise and more. You can then choose to use the rewards your business earns to save money on expenses. I’ve even seen many business owners use the rewards to pay for portions or all of a family vacation. If your business requires many visits to the pump, then check out a credit card that earns additional rewards on gas purchases. If you travel a lot, then apply for a credit card that earns airline miles or other travel rewards. Whatever the nature of your business, apply for a credit card that earns a bonus on the purchases you make most.
Payment options
Not all businesses are the same, but some businesses only get paid a few times or even once per month. Having a credit card due date can wreak havoc on your business cash position if that due date is before the money comes in. Being able to select a payment due date is another convenience offered by most credit card issuers. You get to pick when is the best time for your business to pay it’s bill. Many cards also give your business the flexibility to carry a balance or pay the balance in full each month. Credit card companies want your business and they’re willing to be flexible to work with yours.
By CCRB in Cash Back Cards on November 4 2008
Taking Advantage of the 2008 Holiday Shopping Season
The Kohl’s Corporation is not planning on letting financial experts cramp its holiday season this year. Financial experts around the country predict this to be an extremely glum year in terms of holiday sales. Kohl’s Corp isn’t falling for it.
Instead, the major nationwide retailer plans to send out early holiday shopping ads, more sales events and extended hours. Kohl’s hope to get most shoppers in its doors before Thanksgiving. Kohl’s has never revealed such detailed holiday plans. In fact, Kohl’s has also released sale prices for the upcoming weeks.
While other retailers are gearing up for the worse, Kohl’s is preparing to kick things off with a bang. Typically, Black Friday kicks off the official holiday season. This year, Thanksgiving falls on November 27, which will make it a shorter ‘holiday shopping season.’ The economy and the shorter holiday shopping season have many retailers anxiously awaiting the season.
Instead, Kohl’s has already kicked off its holiday shopping season. Kohl’s is also offering additional bonuses and savings for Kohl’s credit card holders. These card holders will be able to take advantage of “Extra Savings Days” in November and December. Online shoppers are also being targeting. People who shop online will be able to purchase items at exclusive online prices each day.
Kohl’s Chief Executive Officer Kevin Mansell recently said, “We’re focused on stretching people’s budgets. We’re trying to reflect the economic reality our customers are facing.” He also said that this is the first time in the company’s history that it has used online-only deals to attract new customers. Because of this, Kohl’s online sales are growing by more than 50 percent.
Kohl’s is also starting a holiday sweepstakes. The grand prize will be $10,000. There will also be 10 lucky people that win $50 gift cards each day until December 28.
Discover Card recently released a holiday shopping survey. Thirty percent of over 3,500 people surveyed said that they have already taken advantage of October holiday sales. More people are also welcoming the idea of spending less and buying fewer gifts. Mansell says that the Kohl’s Corp has taken everything into consideration. He said, “The only way we’re going to have a successful holiday season is to take (market) share from other people.” You can really take advantage of your holiday budget by using your cash back credit card and Kohl’s sales.
By CCRB in debt on October 29 2008
Debt Consolidation: An Opportunity To Mend Credit Status
Would you believe me if I told you that too many Americans are way over their heads in debt? It’s true. Many Americans are spending more than they make. Credit card balances are at a national all-time high. People all over the country are beginning to be frightened at the amount of debt they have incurred. Debt consolidation seems to be the only answer, especially if you want to mend your credit status.
What exactly is debt consolidation? Debt consolidation just means that all of your current debts (the ones that aren’t paid off) are merged into one debt. There are many different debt consolidation programs. You can take out a debt consolidation loan. You can use a debt consolidation mortgage or remortgage. You can even go through debt counseling to consolidate all of your debt.
All of your loans are taken and put into one loan. Often times, this loan is much more manageable than all of the separate loans. You are able to pay off all of your debt using one loan and one payment. Debt consolidation is sometimes a much cheaper option to the borrower.
There is a common misconception about debt consolidation that we must stop. Many people seem to think that debt consolidation reduces the amount of your total debt. This is not the case. While the amount of debt is not reduced, the interest rates are. If you are paying a lower interest rates on all of your debt, you are bound to save a little money.
There are two main forms of debt consolidation loans. There are unsecured debt consolidation loans and secured debt consolidation loans. The secured debt consolidation loans use collateral to secure the loan. Unsecured loans do not. The interest rate of your debt consolidation loan depends on your credit score, your credit history and your overall financial position.
If you wan to mend your credit status, it is time to look into debt consolidation. You will eliminate calls from your creditor and you’ll be paying your debt off faster than if you try to pay off all of your debt by yourself. Take the hassle out of paying your debt and use a debt consolidation program. You’ll be well on your way to mending your credit.
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