Archives for July 2009

Everyone remembers their first credit card, having a credit card is like coming of age or like being an adult. You’re now a full fledged member of adulthood because you have a credit card. Having a credit card is essential if you want to live in the modern world.

You need to build your credit score, a good credit score preferably and you also need to have buying power when you make large purchases like a car.  Having a good credit score will make it possible to get a mortgage in the future to purchase a home.

After time goes by, the excitement of having that first card has probably warn off, in fact you probably gets tons of credit card offers in the mail now and don’t even bother opening the credit offers. You probably also likeeveryone else paying extremely high interest charges each month and are looking for a way to eliminate credit card debt, or at least reduce credit card debt to a manageable level.

There are several different ways you can use to eliminate credit card debt. You can do-it-yourself, hire a company that specializes in reducing or file for bankruptcy to eliminate all of your debt. The best way and least expensive way is to do it yourself.  Here is what I did and it also worked for a lot of other people in the same predicament. 

I took a look at how much income I have and how much money I am spending each  month. After I crunched those numbers I came up with a plan. For each unsecured credit card debt, like a Master Card or Visa I began paying only the minimum due every month on credit cards that had the lowest interest rate. I then took my remaining money and applied it to the credit card that had the highest interest rate.

I paid as much as I could every month and only bought what I needed, not what I wanted. It took me about nine months to pay off the highest interest card but I did it! I was so excited, after my initial my success, I decided to do the same with my other credit cards.

In two years I didn’t owe any credit card debt at all. I had the financial freedom I hadn’t had since I got my first credit card. Now that I totally eliminated credit card debt I decided to keep my fugal ways and sock money away in a savings account.

Certificates of Deposits are similar to savings accounts but a Bank will issue a certificate for the amount of deposit in the bank. One needs to deposit money into the bank and get the certificate of deposit for the money thus saved. The interest rate of the money in CDs are higher than that of the interest rate for savings accounts.

The difference between savings account and Certificate of Deposit is that the money saved in CDs cannot be withdrawn until the specific period is elapsed. The CDs have some fixed term may be three months, or six months to several years. The money deposited in CDs cannot be withdrawn until the maturity period is reached, otherwise the bank will issue a penalty if the money is withdrawn before the maturity time.

CD rates are normally fixed. The CDs require fixed deposit amount and the banks sometimes offer higher interest rates for higher amounts of deposits.   But it varies from bank to bank. 

The total amount including the principal and interest will be paid at the end of maturity period. But most of the banks and financial institutions offer to deposit the interest periodically into the savings account. Normally the private banks and financial institutions offer much higher interest rates on CDs than public sector banks. Some banks offer to renewal of the CDs after maturity period. So we can extend the CD for another fixed term without withdrawing the money.

 The interest rates depend on the period of deposit.  Some general guidelines for the interest for a typical bank are as follow:

• Higher amount of deposit normally receives a higher interest rate.  But this is not completely true for all the banks; it varies from bank to bank. Some banks offer same interest for any amount of deposit.
• A CD for a longer maturity period receives a higher interest rate. Almost all the banks follow this rule.
• The interest rates also depend on the type of financial institute. A bank or an institution having good profits may offer higher interest rates.
•  Business CD deposits generally get lesser interest rate than personal CD deposits.

If the payment day (maturity date) is a holiday, the total amount is paid by the banks on the next working day.

Saving accounts are good place to place your money. You can put money in them and get interest from it, depending on the saving account’s interest rate.

I faced a problem with my savings account. I had no idea and transferred money from my account to my brother’s account more than five times. I received a notice that if I will transfer money from savings account now, my account will be closed and I was charged a fee.  I came to realize then that I can transfer only three times in a month.

That was a big eye-opener for me, from then I do not transfer money from my saving account. If I have to then I transfer from checking account or I pay by check.  Mostly the banks do not give you the information you want, they try to hide information by printing in small letters.  They charge you taxes, fees which you are not even aware of and they do not tell you when you open an account with them.

I would suggest anyone opening a saving account or checking account with any bank to read all the instructions carefully and try to take good care of your money.  I do believe that opening an account is very necessary and useful, but just be a little cautious.

Finding the best auto insurance rates online is what most people do when shopping and comparing auto insurance companies.  In fact, most car drivers are finding better auto insurance rates on the Internet.

Getting online insurance quotes is easy; you need to have a credit card or debit card to make the payments online.

All you have to do is fill out the insurance application forms, find the best car insurance rate, make an insurance payments online and then the insurance company will send you the insurance card by mail. You can choose car insurance for an entire year or six month intervals.

There are many insurance companies which offer you low auto insurance rates, you can also find insurance rate discounts by also purchasing a home iinsurance policy or renters iinsurance policy with your car iinsurance policy.

I got my insurance online, I searched for companies and on their website I filled in my information to get the auto insurance quotes. After that I called the company to clear some of my doubts and then filled the form online and made the payment by my credit card.

After a week or so my papers arrived in the mail. I got my iinsurance card without any hassalls. On one of the papers it was written keep the copy in your vehicle, so that when you get caught in an accident you have your papers ready.

Good thing is that when it was the time of renewal my insurance company sent me the bill and my insurance card two months before the due date, so that I had enough time to pay the bill.

Carrying cash can be really dangerous at times. But, plastic cash or a credit card makes life lot simpler. These cards can be swiped at almost any establishment around the globe. You can also withdraw cash on your credit card. Credit cards are fun;

Let me explain about what is a Credit Card.  A credit card is part of a system of payments named after the small plastic card issued to users of the system. We can buy goods and services based on the Credit Card holder’s promise to pay for these goods and services. it is nothing but a loan from a bank to the user  for payment to  a merchant or for payment for services.

A credit card is different from a debit card.  A debit card should have the money in the bank account for making payments where as credit cards allow the consumers to ‘revolve’ their balance, at the cost of having interest charged. Most credit cards are issued by local banks.

There are a lot of different types of Credit Cards to choose from.  We should try to understand what type of card is required for our needs before applying for the same. Let us see the different options or types of cards that are available based on our requirements.

•  If we are planning to pay the total amount in full each month,  then a charge  card would be the best option.  If we are going to use the card for balance transfers, then we should look out for a card with very low interest rate on balance transfers.
• Grace period is another factor while selecting a credit card.   Grace period is the period before which we have to pay the balance before an interest is applied by credit card issuing authority.  Longer grace periods will give us advantage as we get more time to pay the bill without any interest.
• One more criteria in selecting a type of credit card is the Credit Limit. This is important because the credit limit influences our purchasing capacity.  If the credit limit is very low, we cannot purchase more costly items.
• Some credit cards offer some rewards for making purchases through their cards.  Even this also can be thought of and check the reward structure.

There are different types of Credit Cards.  We can choose the type of credit card that we need based on the type of our financial need. The Standard Credit Card is the one in which there is some balance up to a certain credit limit.  Once we make a purchase, the credit is used up and it will be made available again when we make the payment.  

One more type of credit card is Premium Credit Card which offers rewards and incentives like reward points, cash back etc. But they have higher fees than standard cards.  Charge Cards do not have any credit limits.  But we need to pay the balance every month in full.   There are many more types of credit cards like Limited Purpose Credit Cards, Prepaid Credit Cards etc.

A Credit Card is  a very convenient alternative to paying  money by cash.

A Credit Card  has many advantages.   It can be used to purchase products or services whenever   and wherever you want, without  any cash and paying them at a later date.   We  can make a  part payment to the issuer of credit card and make the balance payment later along with interest.  We can even withdraw cash from ATMs whenever and wherever we are. 

We can enjoy a revolving credit limit without any charges for a limited period ( mostly 20 to 50 days). Another advantage is we can transact money of  more than one currency, from one  country to other using credit cards. A Credit card can also be used for  making online purchases through internet.  This online credit card facility is easy to use and it is faster than the actual procedures of cash transactions.  Many cards also provide insurance  for card holders.

A number of credit card providers are available now to issue credit cards  to consumers.   For Example:  Visa Cards are issued by  The Visa International Service Association of USA.  American Express cards are issued by American Express or  AmEx is a world wide financial company.  Master Cards  are issued by Master Card Inc.

Master Card is one of the major credit cards which are used regularly by the people around the world and especially in United States of America.  CitiCard is issued by the Citi Bank which is a part of Citigroup. Citigroup is the largest supplier of Citi Cards which are credit cards. In this way there are a lot of company issuing different types of credit cards.

An online saving account which allow your account online access are a really great way to bank. I have a savings account and checking account which can be maintained online.

They are so easy to maintain, I can check how much I spent and even get the summary of accounts online, most of the transactions can be performed online, I don’t even have to go to bank for most transactions. It’s time saving and quick and easy.

All you need for an internet saving account is a computer and an internet connection. There are some things to think about. You have to be careful about keeping your information safe. You should not tell your password to anyone and should not keep a password all the time; you should keep changing your password.

I was reading an article today which said that many people keep same password for all their accounts, which is not a safe thing to do. It is because if anyone gets hold of your password they can have access to all your accounts and all your information.

In spite of the safety factors, online bank accounts are good and easy to use and they make my life easy, so I like them. I am sure there are lots of people who think like me.

Current mortgage rates have been treading down lately because of lower Treasury prices. The decline in both mortgage rates and Treasury prices have been brought on by the Federal Reverse Bank stimulating the economy with low interest rates.

The Fed Funds rate has been in a target range of 0% to one quarter percent since late last year when the credit crises hit and the recession started.

Current Mortgage Rates

Freddie Mac, the Mortgage Bankers Association, MonitorBankRates.com and BankRate.com and all reported mortgage rates being up this past week but still low according to historical standards. 30-year mortgage rates are still hovering around the five percent range.

I remember when fixed rate 30-year mortgages were in the double digits, in the 1970’s my parents had a mortgage rate of 12.75 percent on a split level ranch in Southern California.

Today’s mortgage rates are a lot lower, both conforming mortgages and jumbo rate mortgages are in the five percent to six percent range. Adjustable rate mortgages are also very low these days, currently you can get a three-year conforming adjustable mortgage rate for around 4.70 percent. Five-year adjustable rate mortgages are even lower at around 4.60 percent this week.

A neighbor of mine just did a mortgage refinance, they plan to move in a couple of years so they got an adjustable rate mortgage. They are paying a mortgage rate of only 3.99 percent on a five-year ARM. They actually lowered the monthly mortgage payments by $800 per month.

I have been thinking for a long time whether to buy a brand new car or a used car. A new is obviously the better than a used car but you’ll also have to pay more and your auto insurance costs will be higher to. While a used car purchase will cost less to insurance you always be worried about taking longer trips.

Getting a brand new car means higher monthly loan payments and higher auto insurance premiums for collision auto insurance if you finance the car which you probably will. 

Nowadays there are lots of car insurance companies offering competitive auto insurance quotes. I’m confident I can get a cheap one to have my car insured. I’m thinking of not touching my savings, but if you buy with auto loan from any bank then I have interest rates to worry about.

I am not able to make up my mind on the type of car to buy. I already own a used car and I bought it at very good price $2.000.00, and it is there with me for last two years. It is in a very good working condition. Now we need to buy one more car.

Nowadays all the car companies are offering huge discounts, so that makes it difficult to decide which car to buy. If I go by cost then I will choose the least expensive one, but I really want to buy a SUV. SUV’s are good but their gas mileage isn’t as effient as a car. I also should think about spening less in these difficult economic times. I think I will wait a little longer to decide what to do.

Credit cards have lots of uses, but one thing I like particularly about credit cards is the reward points you accumulate after shopping with the card. I recently (2-3 months ago), got a Gap credit card, and began shopping at Old navy and Gap stores.

I make my monthly credit card payments on time by making use of  online payment systems. I pay my credit card bills online so there is no fuss of writing checks, stamping and posting. So, this week when I got my credit card statement there was a $10 Gap card coupon with it, because I had accumulated 1000  reward points by making a purchase using my rewards credit card. I didn’t know it was coming so I was surprised and happy on receiving this coupon.

Credit card companies give these rewards to entice you to use your card and keep on spending, once you receive credit card rewards you want to make more purchases with your card to get more rewards. When I was rewarded my coupon I started making plans on how to get another one, how many more reward points I needed and how I can score those points. No pun intended but it’s very rewarding to receive a cash coupon.

I think their scheme works on lots of people, otherwise why they would bother about giving rewards to their users. Whatever, I am hooked to my credit card and will keep on spending as long as I can pay my bills in timely manner. I’m also looking into getting a cash back rewards credit card to earn cash when I make purchases using the card.

Ally Bank, formally GMAC Bank is offering 9-month CD rate that currently has an annual percentage yield of 1.90 percent, one of the best CD rates around. What makes this certificate of deposit a “risk free” CD is you can withdrawal your money without penalty.

You can withdraw your money six days after funding your certificate  and anytime after you won’t be charged an early withdrawal penalty. You have to withdrawal the full balance plus all interest earned.

Interest on the certificate of deposit is compounded daily which give you a higher annual percentage yield than a certificate of deposit that compounds monthly or annually.

Account balances are insured by the Federal Deposit Insurance Corporation for up to $250,000. Ally Bank has it’s headquarters in Utah. The bank’s FDIC Cert number is 57803.

Our family friend decided to buy a car; he came to us and told us about his decision. We were happy and told him that while having a car was convenient that was a cost in having one and he should also consider the cost of auto insurance. 

One question I couldn’t stop myself from asking was, whether he was planning to buy it with cash or he intended to apply for an auto loan. He said he was thinking of taking auto loan.

We went to car dealers and looked for a variety of cars and then he selected a pre-owned Audi with price of $23,000. Now that the make and color of car was decided, it was the time to apply for loan, the manager asked him to fill out some forms and then talked to serveral banks to get the best rate for the loan and after fifteen minutes he came and told us that the loan was approved and what the auto loan interest rate was. We were all happy and we told Mr. Matthew that it was the time for celebration.

To register the car with the State of California he had to get auto insurance coverage. Not only did he need liability auto insurance coverage required by the State but he also needed collision insurance coverage since the car was financed by a bank. The dealer would not let him drive the car of the lot until it was insured.

The monthly cost of auto insurance coverage wasn’t thought of by our friend but thankfully he has enough income to pay for it. Before you start shopping for a car get several auto insurance quotes to see how much insuring the car will cost you.

Few days ago, I went to an optical center  to get a pair of contact lenses. The first question the woman asked was, “do I have vision insurance?” I said, “Yes” and gave her my insurance card. 

After seeing the card she made my appointment with the doctor and told me that I will get my lenses after one week.  I told her that it was fine with me.  I got an appointment after two hours, so I decided to look into health insurance online in the meantime while I waited to see the eye doctor.

The doctor saw me and told me that my eyes were good but I needed glasses to read. I decided I wanted contact lenses instead. Then he told me to wear the lenses so that he could check their fitting. He checked them they were perfect for me.

I was happy and I thanked the doctor and was about to leave the store when the lady told me to stop, and said I had to pay the bill. I was surprised, I thought lenses and eye exam were covered in my insurance plan, but she told me that everything was covered but I had to pay $15 co-pay for eye fitting exam.

I asked her what was that and she told me the examination which doctor did after I was wearing the lenses to see whether they fit or not. It was first time I was buying the lenses so I didn’t know about it. I paid the bill with my credit card and left the store learning a new thing.

After four years of working abroad, I was looking for possible investments of my savings. In 1999 the stock market was very bullish and I thought was a good investment. In July that year, I purchased 6,000 shares of Cisco Systems at around $64 per share. For those who do not know, Cisco Systems is the 600 pound gorilla in computer networking, in particuall routers. 

Then came the dot-com bubble burst and the NASDAQ went from 5,000 down to less than 15oo in a few short months. My $384,000 investment was now worth less than half. It took a good eight years for me to recover my investment. Not with Cisco systems which never came back to the price I bought it at but with investments on energy stocks. Thankfully I sold all my stock holdings before the credit crises last fall and the meltdown in stocks.   

Now that I’m older, closer to retirement I need to protect my captial. That being said, I decided to invest in certificate of deposits rather than risk any of my principal. CD Rates aren’t that high these days but at least I know my principal is protected up to $250,00 by the FDIC.

I decided since interest rates are so low I would stick to shorter term certificate of deposits so my money wouldn’t be locked in for a long term at these low rates. Currently my money is in three-month certificate of deposits at EverBank. The bank is offering one of the best CD rates for a three-month certificate. The annual percentage yield is currently at 1.25 percent.