The Federal Deposit Insurance Corporation has come up with a new proposal for calculating its fees. According to the proposal, banks that are bigger and riskier will have to pay more for insurance of their deposits so that they are discouraged from indulging in risky behavior. [Read more…]
Government Programs to Prevent Foreclosure Rejected by Major Banks
During the economic boom, many banks had given mortgage loans without checking the ability of the borrowers to pay the loan back. As a result, many Americans are stuck with huge mortgage debts that they cannot pay and face the threat of foreclosure.
In order to help people deal with their underwater mortgages, the government has come up with many schemes such as buying mortgage backed securities and launching debt consolidation programs for mortgages. One such scheme is mortgage modification through reduction of the principal amount of mortgages. [Read more…]
IMF Considers Levy on Banks Based on their Risk to Global Economy
The International Monetary Fund (IMF) has been considering various plans for encouraging a common global response towards economic crises. One of the proposals it is considering is a levy on banks depending on their impact on the global economy. [Read more…]
Use Financial Leverage for Your eBay Business
According to the Nielsen NetRatings, eBay is the clear leader among ecommerce websites, followed by Amazon. It is a popular site among merchants, as it allows you to do business without too much initial investment. It gives you the ability to conveniently work from home and still reach millions of customers.
One of the tricks that you can use to make money on eBay is to use financial leverage, which means carrying out a business transaction without investing your own money in it. It is often used by real estate investors, but you can use it on a smaller level on the website, without taking too many risks.
How it works
All you have to do is to hunt for discounts in stores around your house. Buy products you get at low prices through promotional offers, in wholesale markets or at unclaimed goods stores and then sell them at higher prices on eBay.
You can avoid making an investment in the purchase by using a credit card. If you manage to sell the products before the payment date, then you do not have to put any money of your own. Get hold of the products as soon as you can and do not make any delay in listing them on the site as that will give you more time for selling the products.
Minimal risks
The greatest benefit is that you hardly take any risks in this endeavor. Most of the stores will allow you to return the goods within a certain period, which will vary from two weeks to a month. If there isn’t enough demand for your products, then you can just return them to the shop without losing any money.
Don’t wait too long
In most cases, you should not keep a product for too long as you could miss the return deadline. Moreover, your credit card payment date would be near and you will have to pay for the product from your own pocket. Keeping the product unsold for too long will end up making you lose the leverage eventually.
Do not be discouraged if your product does not sell initially. This experience is valuable as it gives you a feel of the market. It also helps you in understanding how you should price your products in future so that you can attract more customers and grow your business.
Differences between a Credit Card and a Charge Card
Most people do not realize that there is a huge difference between a charge card and a credit card. It is important to understand how the two work, so that you use them appropriately.
Carry Forward Balance
Whenever you make a purchase using your credit card, you are effectively taking a loan for that amount. You have to repay the company later and you pay an interest for the credit you took. You need to make some minimum payments and you can carry your remaining balance to the next month. This means you do not have to repay the entire debt that you took in that month.
In a charge card, the payment has to be made in full every month. There is no option of carrying your balance forward. There are no minimum payments or interest rates. If you fail to repay the whole amount, then you would have to pay additional fees and penalties.
Annual Fees
You would be charged an annual fee for a charge card as the card issuer does not make a profit by charging you an interest on the carry-forward balance. Charge cards usually have a good rewards point system, which would compensate for the fees to some extent. On the other hand, most of the credit cards do not require an annual fee.
FICO Scores
The biggest advantage of charge cards is that you can make a large number of purchases without affecting your credit score. FICO scores take into account the ratio of utilized credit to available credit. Since charge cards do not really have a fixed credit limit, they are usually excluded while calculating the ratio, due to which a high balance on your charge card would not affect your credit score. The TransUnion FICO score does include charge card balance, but this will also be changing soon.
If you are confused about which card to opt for, then you should look at your personal needs. If you want to carry forward your balance or if you do not want to pay an annual fee, then it is better to get a credit card. On the other hand, if you are sure that you would be making full payment every month and want to avoid spending beyond your limit, then a charge card would be more suitable for you.
A charge card is also the better option when you are worried about credit card debt affecting your credit score.
FDIC’s List of Problematic Banks Grows Should You Be Worried?
The ‘Problem List’ of the Federal Deposit Insurance Corporation comprises of all banks that are facing serious financial troubles. Factors that are considered in determining if a bank is vulnerable include assets, income, liquidity, sensitivity to market conditions, and the management of the bank. The number of banks in the list stood at 702 at the end of 2009 and it has been predicted that this year will be even worse. [Read more…]
Understanding Exclusion Clauses in your Life Insurance Policy
All life insurance policies have exclusion clauses that can lead to revocation of coverage. It is important to understand these clauses so that your heirs are not denied the insurance amount.
Material misrepresentation
Material misrepresentation, including intentional falsehoods or omission of important information, would lead to your policy being revoked. This includes factors that the company takes into account while deciding your premium or your eligibility for the policy. In most states, there is an incontestability clause, because of which the company [Read more…]
Big Companies are Managing to Escape Taxman’s Net
The auditing of tax returns of big companies has decreased in the last few years even though the federal government has reiterated many times that it will crackdown on the big guys who are trying to decrease their tax liabilities. Last year, only one-fourth of the big league companies were audited. [Read more…]
How to Purchase Insurance for Vacant Homes
Due to the steep decline in the real estate market, there are many sellers who are finding it difficult to get a buyer for their house. The house remains vacant for a long time while it is up for sale. The problem is that they might lose their insurance cover when they leave the house, as a vacant home is considered riskier than an occupied one. [Read more…]
How to Deal with Collection Agents
If you are withholding payment in case of any billing mistakes, or if you are simply unable to make regular payments on your debts, you may have to end up dealing with a debt collection agency.
There are two types of debt collectors. Many organizations have a collections department, which works as a separate operation, similar to billing, payroll etc. These are relatively easy to deal with, as you can work with them to resolve the issue quickly. [Read more…]
How to Invest in a Mutual Fund
Investing in mutual funds is a great way to earn higher returns on your funds. Understanding how the mutual fund market works and the key success factors for such investments can make sure that you keep your money safe. [Read more…]
Strike a Balance between Spending and Saving
There are three kinds of people in this world: excessive spenders, misers, and people who know how to balance their spending. And you don’t want to fall in the first two categories.
An excessive spender is a person who makes extravagant expenses, such as luxury watches, expensive dinners or entertainment expenses, even if he is not rich enough to afford all these. He spends money as soon as he has saved up enough for his next purchase. [Read more…]
Are Increasing Cable Expenses Busting Your Budget?
Entertainment costs form an important part of the monthly bills of any household. And cable bill is one of the first items to attract attention when it comes to reducing expenditure on entertainment services.
According to the Pew Research Centre, after house rents, one of the largest recurring household expenditure reported by American consumers is entertainment and communication. Cable and satellite television, cell phone services and internet services, all fall in this category. [Read more…]
Prioritizing Your Financial Goals for Wealth Building
I consider prioritizing financial goals and money allocation as the most important part of financial planning. People are often faced with questions of whether to repay debt, save or invest money. If you have to choose between these goals, then your current financial situation should be your best guide [Read more…]
Municipal Bonds An Attractive Opportunity for Wealthy Investors
Municipal bonds are debt based securities issued by states and cities to finance their day to day operations and to fund entities like colleges, NGOs, nonprofit hospitals etc. The main advantage of these interest paying securities is their tax exemption status. This relieves the buyers from paying taxes on the interest income and also allows the government to borrow at competitive rates so that they can fund their large projects. [Read more…]
Withdrawing CD Money before Maturity can be Expensive
Certificate of Deposits (CDs) as we all know are bank accounts in which the customer deposits a minimum balance for a fixed period. These accounts offer higher interest rates than savings accounts but have a hefty penalty if you withdraw your money before maturity period of the deposit. [Read more…]
Low Cost Investing with Exchange Traded Funds
Exchange Traded Funds (ETFs) are either actively managed or indexed investment funds comprising of a stocks basket of a number of different companies traded on the markets. ETFs are traded on the stock exchanges like shares of the companies. [Read more…]
Making Work Pay Tax Credit Leads to Confusion
The tax credit scheme Making Work Pay is a part of the American Recovery and Reinvestment Act of 2009, signed into law by President Obama in February last year.
This scheme affects 95% of the American population and has been undertaken by the Obama government in an effort to credit a few extra dollars in to the accounts of Americans to increase their disposable income. This will lead to a multiplier effect, which is expected to infuse as much as $65 billion in the economy and act as yet another stimulus for economic recovery. [Read more…]
How Rising Interest Rates Can Impact You
Interest rates have slowly started picking up and this will have a huge impact on your personal finances. It will increase the costs of your debt while giving you better returns on your savings.
During the economic recession, the Fed pumped in money into the economy. It kept the banks that were struggling because of high risk mortgage loans afloat by giving huge loans. It also made purchases of mortgage backed securities and kept the money supply in the economy at a high level. The economy seems to be on the road towards recovery and most of the banks were saved. [Read more…]
Apply for Part Time Insurance for Cars Not in Use
Has the recession forced you to start using public transport and avoid driving your car? If yes, then you are one of the many people who have cut down on using their private vehicles in order to save costs on fuel and maintenance. Many families who have multiple vehicles have also stopped using some of their vehicles. [Read more…]
Consumer Spending is Rising Big Increase in Luxury Spending
Most Americans consumers had cut down on spending during recession, but there are clear signs that people are coming out of their shell now and are willing to spend more.
There are many signs of economic recovery as the job market is picking up, industrial output is increasing and retail sales are going up. And the icing on the cake is that consumers are no longer restricting their spending to necessities like food and medical expenses. They are spending on clothes, jewelry, holidays and cars. [Read more…]
Credit Checks are Being Used to Screen Employees
The practice of major credit card agencies giving credit histories of job candidates to potential employers has come under scrutiny. Many people have complained that they have lost out on job opportunities because of their credit history, despite being qualified for that position. [Read more…]
Do Credit Card Reward Programs Really Benefit You?
Credit Card reward programs are becoming extremely popular these days as people try to save money wherever they can. Under these programs, you get some points for every dollar you spend. Once you have reached a minimum balance of points, you can redeem it in form of cash or some other financial benefit, depending on which reward program you have subscribed to. [Read more…]
Save Money by Carefully Timing Major Events in Your Life
All of us know that a lot of caution needs to be exercised when taking important financial decisions. But one thing that people often ignore is that sometimes decisions that are not financial in nature can also have a huge impact on their finances. Timing some of these decisions carefully can save you a lot of money. [Read more…]
New Laws for Regulating Student Loans Going into Effect
With college education becoming expensive every year, students’ loans are playing an increasingly important role. The student loan system is however up for some major changes now. [Read more…]
Look for Deals on High Value Expenses to Save Money
One of the best ways to lower your expenditure is to look for various discounts and deals on high value products and services. Here are some deals that you may have ignored in the past.
Airline promotional offers
It is often necessary to take a flight to a different city to meet people or for any other purpose. But airline tickets can be very expensive. The good news is you can benefit from promotional offers launched by various airlines. [Read more…]
Banks Caught Hiding Their Debt Levels from Investors and You
The Wall Street Journal has reported that several large banks hid their risk levels for the last five quarters, according to the statistics from the Federal Reserve Bank of New York.
About 20 banks, including J.P. Morgan Chase & Co., Morgan Stanley, Goldman Sachs Group Inc, Citigroup Inc. and Bank of America Corp. hid the actual debt that they had taken for funding trading in securities. They used to temporarily lower their debts at the end of each quarter when banks have to publicly disclose their debt data and then they increased their debt levels again in the next quarter. [Read more…]
How Exchange Traded Funds or ETF Work
An exchange-traded fund (ETF) is an instrument that tracks a single asset, or a set of assets, and trades on the exchange like a stock. It is becoming a popular investment option, but you should know how it works before you put your money in it. [Read more…]
Proposal to Make Loan Backed Bonds Transparent and Safer
During the 2008 market crash, a number of investors who had significant sums parked in consumer loan backed bonds found their investments turning bad. Soaring default rates meant that many such bonds failed to generate the returns that the issuers had ‘guaranteed’. The Securities and Exchange Commission has now proposed some new rules, which are aimed at addressing these risks and making such bonds attractive investment instruments once again. [Read more…]
How to Save Money While Improving Your Lawn
These are tough times for the economy and you should try to save money wherever you can. One area that is often ignored, but can save you a significant amount of money, is you lawn. Here are some easy ways through which you can save on your lawn expenses. [Read more…]
Make Your Future Financially Secure by Eliminating Unnecessary Expenses
One of the most important things that you can do for improving your financial condition is reducing your expenditure. You can boost your retirement or emergency funds, increase your savings, or invest more by making some simple reductions in your expenses. [Read more…]
