A New Cash Back Credit Card for the New Year?

January 2, 2011 · Filed Under Cash Back Credit Card, Credit Card · Comment 

We often make goals for New Year like we would not eat too much of sweet, or want to loose weight or may be other things which we might only want to do rather then saying it. But one important thing that every one should follow for the New Year is that you must re-evaluate your credit cards.

In 2010 there were various credit cards with different offers which came in the market. Many of the present credit card companies changed their reward programs. So it is important for you to evaluate these credit cards how they work.

The biggest changes that we had in 2010 as far as the credit card rewards are concerned:

The Chase Sapphire card is launched

The premium rewards credit card that is advertised for the upper middle-class households are called Chase Sapphire card. There is no annual fee on the regular version card and gives you point that could be utilize for buying airline tickets any time. However the Chase Sapphire card does have an annual fee, but there are benefits and higher points are given to you.

AmEx introduces the “Premier” Gold card

For decades people has been using AMEX gold card, it also carries an annual fee of $125 and offers you various range of benefits. People wanting to spend an extra amount of $50 they can enjoy the premier version of the Gold card, now this premier gold card offers you higher rewards in comparison to gold card.

The Citi Forward card cements itself as the best for restaurants

There were another point gathering card which was introduced well known for its 5x points on restaurants and fast food known as Citi Forward Card. Well there were reward program competition on credit cards in 2010, which had perished till date; however the only card to survive and provide 5x points on these categories is Citi Forward credit card.

To give you unlimited 3% cash back on your top three categories of spending and one of the most popular cash back credit card in the market is the Chase Freedom Credit card. However in 2010 they changed their tariff by 2% that means they would be giving 5% of cash back on categories that rotate every quarter.

Conclusion?

During 2010 the credit card rewards scene changed tremendously. Make sure you familiarize yourself with the new reward cards, as well as those which have changed their programs.

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Why are debt reduction programs popular?

November 24, 2010 · Filed Under Debt, Debt reduction · 1 Comment 

These days the popular program that you would find is the credit debt settlement. The new rule added to this program is the biggest reason behind its popularity of credit debt program in the settlement industry. The new rule has its own parameters where in any debt settlement company or negotiation firm cannot charge the customer for giving them advice or for negotiation service before the service has been provided. The debt reduction companies can only charge the customers after the service has been provided and the customers are convinced with the service. The debt settlement companies faces legal charges and can be declared as an illegal company if found that the company is charging upfront from its customer as fee.

There are various advantages associated with these rule:

1. Since now a days fraud company can be located or any kind of fraud can be traced the illegal debt reduction companies have stopped operating and also their profit has reduced. In many occasion these companies use to charge the customers up front and use to get away with out providing any kind of service at all. These types of companies have packed their luggage and have quitted the industry.

2. Now the legal companies have come out in numbers, earlier when the illegal companies were operating it was in very few occasions that legal firms use to get business. However with the elimination of the illegal companies the legal firms are getting good business and have grown in numbers.

3. In order to attract customers in numbers the debt settlement companies are charging very low. They have set up high standard of service for their customers. The debt settlement companies know very well that there is very less margin for error. They also know that any kind of delay would not be entertained and the customers can easily switch to other debt settlement company.

4. The lender has great profit as a result of cases being solved in a rapid manner. Debt reduction program have made the lenders are giving more as they are making money very rapidly and getting exempted from tax, they have minimized their losses and maximized profit.

5. Due to aggressive lending done by lenders; the economy has even benefited. Due to lending; the investments have increased, people are getting employment and economic growth is taken place.

According to a recent survey the economy of America has grown by 0.8% in the last quarter.
The government has aided the program and the programs have provided with the above stated benefits to the consumers, the lenders and this has benefited the economy overall. This is why debt settlement programs are becoming very famous.

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Is your home a good investment during your old age?

October 28, 2010 · Filed Under Investment · Comment 

When a person grows old, most of the times, the only principal assets he retains is his home. Everyone wants to stay in their own homes but during the old age, many people go through some financial problems and they have to make a choice whether they should sell their homes and move to an apartment or assisted care facility or to make use of a reverse mortgage.

Most of the older people tend to do the reverse mortgage to make use of the equity in their homes. The banks with whom these elderly people have been dealing with for a long time seem to be helpful in obtaining the use of the equity in their home. There is an argument that senior citizens should be able to earn more cash on the money, if properly invested, than the home as it may appreciate.

By doing a reverse mortgage, the lender offers cash to the borrower homeowner as a lump sum amount or in monthly payments, a line of credit or a combination of both methods. The title of the home remains with the homeowner but a lien is placed by the lender on the property for the amount paid to the homeowner. The homeowner is still responsible for maintaining the property, and paying insurance and real estate taxes in time. The homeowner does not make any payments to the mortgage and that’s why interests keep accruing over the period of time.

Homeowners can fall deeper into these kinds of debts over the period of time because they will be drawing more amounts every time. After a period of time, no equity will be left on the home because of the amount borrowed equal to the value of the loan. The value of the property may go down and because of this, the amount of the loan may exceed the value of the property.

Review the fees when you do a re-mortgage. The fees for such a loan could be about 7% of the home’s value. This fee is generally added to the loan balance and accrues interest over the period of time of the loan. The fees and the interest need to be paid off before the loan terms come to an end. Certain closing costs can also increase the total amount of the loan.

If a senior citizen is trying to do a reverse mortgage to increase the earnings on the equity from the house, the yield on the invested funds is much less than what was expected while doing the reverse mortgage.

Despite the various issues, many elderly people still consider to do a reverse mortgage because of certain unexpected financial requirements. It may also be the way to stay in the same home until their death when the money runs out, even though it becomes difficult for the homeowner to leave any property to their heirs.

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Practical Steps to Building Substantial Net Worth

September 25, 2010 · Filed Under Net Worth, Personal Finance · Comment 

The common American Dream of many working professionals is to become a millionaire, or at least to build enough net worth to retire comfortably. You would be hard-pressed to find a young working professional that says he or she has no desire to retire comfortably. However, statistics tell us that most people, in fact, do not retire comfortably. Each year the Employee Benefit Research Institute conducts in-depth research concerning the retirement investing habits of Americans. In 2010, the Retirement Confidence Survey indicated that the percentage of Americans who were financial prepared for retirement had fallen for the third consecutive time.

Here are statistics from the Retirement Confidence Survey:

• According to the survey, 43% of American workers said they had less than $10,000 in savings

• 27% of workers had less than $1,000

• Only 16% of respondents said they have confidence they will have enough money to retire comfortably.

The statistics are clear. There is a discrepancy between what most American workers want—to retire comfortably—and the reality of what is actually happening. This begs the question—why are Americans not able to save enough money and retire comfortably?

Americans are not retiring comfortably due to one of two reasons. Either they are not earning enough money, or they are not properly managing the money they are making. Let’s take a closer look at the first possibility. How much does the average American household earn during the course of a professional career?

Jaden is a 25 year old college graduate. Due to a challenging job market, Jaden takes a job at a small company for $25,000. If Jaden works for the next 35 years and receives an average raise each year of 3%, he will earn a total of $1.5 million over the course of his career. That’s a fair bit of money! Furthermore, Jaden’s earning potential never jumps significantly in our example, but in real life most people’s income jumps significantly during certain periods of their professional career due to promotions, furthering education, etc.
Thus, the average American makes plenty of money during the course of a working career, so the problem must be in the proper management of daily finances. The reality is that the American economy is a debt-based economy where consumers are encouraged and even expected to finance purchases by incurring large debts. Most people’s initiation into adult life includes taking on an incredible amount of debt. Most Americans incur large education debts and credit card debts in their late teens and early 20’s, and since their initiation into adult life is full of debt, it becomes normal to continually finance purchases with debt, and once this cycle is solidified in a person’s life, it is very difficult to break.

This is a major problem and a leading cause of why many Americans never build substantial net worth. Net worth is measured as your assets minus your liabilities. As stated in the previous paragraph, most Americans tend to begin adult life with tons of liabilities in the form of college loans, credit card debt and car loans, and basically no assets. In order to plan for a comfortable retirement, it is absolutely essential that a person’s first objective be to eliminate liabilities. The quickest way to increase net worth is not to focus on buying and investing assets, but it is to focus on eliminating the liabilities.

The first practical step to eliminating liabilities is to build an emergency savings account of $1,000. The purpose of this savings account is twofold: first, it helps build the habit of saving money, and two, it acts as your buffer against unexpected daily expenses. Most people finance unexpected expenses such as car repairs, doctor visits, etc with the credit card debt. This $1,000 emergency savings fund helps a person develop the habit of saving money and it helps to break the cycle of always going further into debt.

Once the $1,000 savings fund is built, then it is time to begin focusing on paying down debts. It is best to live frugally and funnel as much income each month as possible toward paying off debt. It may not be fun, but over the long-term it will lead to a much more comfortable retirement and life in general. Risky investments such as stocks and the forex market should wait until risk capital is available.

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Legal issues in repossession

September 22, 2010 · Filed Under Repossession · Comment 

Automobile companies who do the repossession and people who get their vehicles repossessed have to deal with a lot of legal issues in the process. Every state has its own laws of repossession. Every consumer must be aware of the laws in his state so that he knows the dos and don’ts in an instance of repossession.

Repossession happens when you have taken a car loan and are not able to make the payments on time. The car is attached with the loan and if you are defaulting in your payments, the car will come at risk. Since these purchases are a form of loan, the buyer does not actually own the item until the loan has been repaid in full. In legal terms, the lender will keep the title until the loan is paid in full and can repossess the vehicle without going to the court in accordance with the state laws.

When repossession has to be done, the lender will retain the services of a company that specializes in repossessions to collect the property for them. Even though repossession is legal in most states, there are some limitations on the methods that are legally allowed for these companies to take repossession of the property. There are certain legal issues in most of the states while repossession is done.

Before the repossession is done, the borrower has to be informed about the outstanding loan being in default. It should be clearly mentioned in the contract that defaulting on the specified number of payments will result in the lender taking actions to repossess the item in question.

Repossession has to be done following the laws of the state of the borrower. They cannot illegally gain entry to a garage, house or other property in order to take repossession of the item.

When repossession is done, there should be no physical damage done to the other property of the borrower. They cannot remove items from walls, damage cabinets or break the entrance gates.

No item other than the property attached to the loan as a security is to be repossessed. They cannot, for instance take possession of a boat that is on a trailer attached to a truck that is to be repossessed.

Under U.S. law, a repossession company or agent who violates these laws can see the repossession overturned in court and have to pay damages to the individual against who the repossession was carried out.

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