Goldman Sachs, the investment banking giant, could face a probe into its activities by some of the European countries. Following the fraud case against the company, the United Kingdom and Germany have asked for information from the US Securities and Exchange Commission (SEC) regarding the activities of the company. [Read more…]
Mortgage Debt Payments Fail to Pick Up Despite Economic Recovery
Statistics show that most consumers are choosing to make their credit card payments over their mortgage payments. Even after the recession is well and truly over, this trend has not changed, which could be a worrying sign for the housing market. [Read more…]
Federal Auditors Say SEC Ignored Red Flags against Allen Stanford
The investigations against Allen Stanford started early 2009 February 17 2009, he was charged by the U.S. Securities and Exchange Commission (SEC) with fraud and multiple violations of U.S. securities laws, which led to his arrest by the FBI on June 18, 2009, accused of $7 billion fraud. [Read more…]
Treasury Secretary Speaks on Urgent Financial Matters
Treasury Secretary Timothy F. Geithner recently spoke about some important financial issues on NBC’s Meet the Press. Here are his views on two issues that are likely to be in the news for the next few days.
Financial System Overhaul
Geithner reiterated that America needs some serious financial changes. The Democrats have introduced the financial reform bill, which is likely to ensure that there is a system for preventing future bailouts of financial firms if their failure will hurt the economy. [Read more…]
New Law Changes Flexible Spending Plan
The new healthcare law has brought about some important changes in the flexible spending program. These changes could have a significant impact on your finances.
Flexible spending accounts can be used to keep pre-tax money for certain health care costs. You assess your health care needs and keep some money for the expenses. You can save about one-fifth of the costs in this way by using your pre-tax money. A flexible spending plan allows you to cover a number of health-related costs like over the counter medicines, sunscreens, eyeglasses, dental costs and so on. [Read more…]
Fixed Income Investment Options for Post Retirement Life
Retirement funds and bank accounts, with their falling returns, can no longer guarantee a secure life after retirement. People have become wary of relying on traditional investment options for supporting themselves after what transpired during the financial crisis. An alternative is fixed income investments, which allow you to strike a good balance between risk and return. [Read more…]
Upcoming Bubbles in the Economy
The real estate bubble left a mark on all sectors of the economy when it burst. If economists are to be believed, we are again seeing the formation of some serious market bubbles. Here are some economic bubbles, which I believe could burst in the near future. [Read more…]
Benefits of Having a Money Buddy During Financial Troubles
A ‘money buddy’ is a close friend, relative or well-wisher who is facing the same financial troubles as you are. Finding such a person will help you in many ways when you are having financial troubles. [Read more…]
Alternative Ways to Get Rewards for Spending
Credit card companies had originally come up with the idea of a rewards program in which they give cardholders some benefits for making purchases using their credit card. But these programs are not that attractive anymore as benefits per dollar spent have fallen. [Read more…]
Do Not Ignore Signs of Financial Trouble Act Quickly
People are often caught off guard by financial troubles as they are not prepared to handle them and they do not know how to react under such circumstances. Here are some useful tips for battling your financial problems.
Identify and analyze the problem
You will worsen your financial problems if you do not identify their source immediately. People often go in denial when they see signs of financial trouble. Unpaid bills, missed credit card payments and low savings are some of the common indicators of your worsening financial condition. You should not ignore your problem as you will just get used to that state and will only continue to make it worse. [Read more…]
Future Bailouts Ruled Out by Senate
The Republicans and the Democrats are at loggerheads over various aspects of the new finance bill. But there is at least one thing that both wings have reached an agreement on. It has been agreed that there should not be any more bailouts of major financial institutions using the taxpayers’ money. [Read more…]
Impact of Canceling Unwanted Credit Cards on Your Credit Score
Sometimes we end up with unwanted credit cards that we applied for without giving much thought. But getting rid of such cards is not such a simple decision as it has a bearing on your credit score.
People end up with these cards because they apply for many cards at the same time thinking that they will be rejected for a few or it will be quite sometime before they will be approved for them. They are also under the impression that they will have plenty of time later to decide if they really want the card or not. But that really is not the case, as it becomes tricky to get rid of the card without affecting your credit score negatively. [Read more…]
Insurers Trying to Circumvent Healthcare Law
Major insurers are trying to change their accounting practices in order to bypass some of the restrictions under the new healthcare law. The law requires that large group plans should spend 85% of the premium amount on actual medical care and small plans must spend 80% of the amount. But it seems insurance companies are now trying to pass some administrative costs as medical costs in order to circumvent the law. [Read more…]
Leveraged Buyouts Could Be Revived Soon
Private equity firms have always preferred leveraged buyouts as the main method of acquiring a new company. The past couple of years have seen the private equity market going through a rough phase and activity almost drying up. The last time a major buyout was announced was that of Hilton by Blackstone in July 2007. Ever since the financial downturn, the only major buyout has been that of IMS Health. [Read more…]
How to Secure Private Student Loans
Many students have to turn to private loans after maxing out their Federal Stafford Loans. But you may find it very difficult to get private loans these days. Most of the lenders have stopped or suspended their student loan programs and more will follow suit as federal subsidies to private lenders are withdrawn from June 30. You can now get a private student loan only if you take some active steps towards improving your eligibility.
Improve your credit score
One of the most important factors considered by private lenders when giving a student loan is the credit score of the applicant. Having a good credit score will considerably improve your chances, as other applicants are also young adults who will very rarely have a good credit history.
Another advantage of having a good credit score is that you will be able to get lower interest rates. You can start working on your score by getting a free credit report. You are legally entitled to three free credit reports every year, one from each of the three major credit reporting agencies – Experian, Equifax and TransUnion.
Look for any mistakes in the reports and get them rectified. Also see what you can do to improve your score, such as reducing your credit card debt.
Find a co-signer
If you are a freshman or a sophomore, then you will probably need a co-signer. It is only in the later years, when most students have an established credit history, that lenders consider giving them loans independently. You can approach your parents, family members and even close friends to act as a co-signer. It will help your cause if you can find someone with a healthy credit record.
Look for established lenders
Finding a lender for a student loan is a big challenge. You should approach those banks and institutions with which you have an existing relationship. If you have done business with them earlier, then they will be familiar with your track record and it will be easier to get a good deal. You can also look for an established lender on your school’s preferred lenders list or your local community banks.
Another alternative is to go for peer-to-peer lending sites, which may offer a convenient loan arrangement without a lot of paperwork. But these sites might not be able to help if the loan amount that you are seeking is large.
Dubious Deals Come Back to Haunt Wall Street
The news that Goldman Sachs acted against the interests of its own customers have shaken up the financial world. The Securities and Exchange Commission suit against the company could have an irreversible impact on the industry, but the changes would be positive for everyone else except the banks. [Read more…]
How Rising Interest Rates Will Impact You
The US economy has recovered from the economic recession, but with all the money that has been pumped in by the government, it is now facing the problem of inflation. The Federal Reserve is taking several steps to deal with inflation without touching benchmark interest rates. For example, it has stopped purchasing mortgage-backed securities, which will reduce the rate at which money is entering the economy. [Read more…]
Loan Modification Program Proves to be Ineffective
The Obama administration’s Home Affordable Modifications program, under which distressed homeowners are being helped by modifying their mortgage loans so that they can avoid foreclosure, is likely to prove ineffective.
The latest statistics released by the Treasury Department and the Housing and Urban Development Department show that the number of borrowers who are defaulting on modified mortgage loans is quite high. Last month, the number of ‘cancelled’ loans doubled and reached close to 3,000 from around 1,500 in February. An even larger number have not been making their mortgage payments on time. [Read more…]
How to Increase the Returns from Your Investments
We make investments in order to get good returns on our money. But we often feel disappointed by how our investments fare. A lot of the times, this is because we do not invest in a structured way and don’t even monitor returns regularly from our investments. Here I will discuss some practical ways with which you can maximize the gains on your investments. [Read more…]
How to Manage Credit Card Debt as You Get Older
The retirement years if not planned for, can be accompanied with unwanted financial troubles. A lot of senior citizens find themselves under huge credit card debt burden which takes a huge toll on their pensions and depletes their savings. Besides, with old age comes the additional burden of health care costs such as that for doctor’s visits, medications, and other related expenses. Handling all this along with your credit card debt would be nothing less than a nightmare. [Read more…]
How to Save Money by Avoiding Bank Fees
Banks provide various facilities to their customers, but if you thought all that was free then think again. A bank’s job is to make money out of its operations and for almost every service that it provides, you will be charged a fee.
That however does not mean you can’t do anything to save on bank fees. Here are a few tips to minimize your bank related expenses. [Read more…]
FDIC Proposes Higher Fees for Larger and Riskier Banks
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…]
