A credit card can provide you with the financial freedom you need to make larger purchases and quick buys when you do not have cash handy. However, credit cards can also saddle you with mountains of high-interest debt. The key to using credit wisely often lies in choosing the right credit card for your needs. There are a host of factors that you should consider before signing up for a credit card. If you study your options carefully, the odds are higher that you’ll make the right credit card choice. Interest rate The most important number to know when it comes to a credit card is the card’s interest rate. Usually expressed as an annual percentage rate, the interest rates on most consumer credit cards range from 12 percent to as high as 25 percent. The lower the rate, the better. The interest rate kicks in when you do not pay off your credit card’s balance each month. Moreover, if your card’s interest rate is high, the amount of charged interest can soar quickly. Consider that the Federal Reserve Board estimates that a credit card balance of $4,000 with an interest rate of 18 percent will take 94 months to pay off if a minimum monthly payment of $80 is made each month. During this time, you’ll pay $3,448 in interest charges on that $4,000 debt. That does not seem like a good deal because it is not. Carrying high balances on your credit cards can cost you thousands of dollars. That is why it is important to find the lowest interest rate possible if you are likely to carry a monthly balance on your credit cards. Of course, if you pay off your card’s balance every month, interest rates will not matter. They only kick in when you carry that card balance from one month to the next. Penalties Credit card companies often charge a host of fees. It is important to study the paperwork that comes with your credit card so that these fees do not surprise you. Your card might charge an annual fee that you’ll have to pay every year. These fees vary but can range from $20 to more than $100. Some cards will charge an application fee when you apply for them while others will charge a set-up fee after you open a new account with them. Cash advance fees can add up, too. Most cards will charge you every time you use them to get cash. That fee might be a flat fee of, say, $5 or a percentage of the amount of cash you access with your credit card. Some cards might even impose a credit-limit-increase fee if you ask for and obtain a higher credit limit. All cards will charge you penalty fees if you pay your bill late or make purchases that put you over your credit limit. These fees, too, will vary, with some as little as $15 and others $40 or more. The real penalty with paying your credit card bill late, though, often comes in the form of a higher interest rate. Read your card agreement carefully; some credit card companies reserve the right to boost your low-interest rate to one as high as 29.99 percent if you do not pay your bill on time. Moreover, these same companies might keep your rate at the penalty level indefinitely. Don’t forget to keep these fees in mind when selecting a credit card. Too many fees and your low-interest-rate credit card might not seem like such a bargain after all. Special offers Some credit cards come with special offers and incentives. Cash-back cards, for example, are attractive today. These cards will refund a percentage of the purchases you make with them. You will then receive those dollars — usually credited to your credit card account — at regular intervals. Some cash-back cards are category specific. They’ll provide you 5 percent cash back every time you use your card to buy groceries, fill your car with gas or make hotel reservations. Other cards provide a blanket cash-back amount, awarding you a percentage of cash back with every purchase that you make with your cards. You can also choose from several rewards cards. These cards provide you with rewards points for every purchase you make with them. After your points add up to a high enough level, you can cash them in to buy electronics, book hotel reservations or purchase restaurant gift certificates. Other rewards cards let you accumulate airline miles with every credit card purchase you make. After you gather enough miles, you can turn those miles into free flights to destinations across the globe. Rewards cards are enticing. However, they can also be dangerous. Make sure that any rewards card for which you sign up doesn’t come with high fees or interest rates. Higher rates and fees will negate any rewards or cash-back bonuses you receive. Make sure not to overspend with these cards in an effort to rack up more rewards or cash-back bonuses. Again, the amount of debt that you acquire can more than negate the rewards they provide. Credit card shopping Shopping for the right credit card is no easy task. Fortunately, it is easier than ever to shop for credit cards today thanks to the Internet. You can quickly access the customer agreements of a wide variety of credit cards online. You can also quickly access the interest rates, fees and incentives that these cards offer, also online. Remember, though, that even cards with advantageous terms can lead you to financial trouble if you do not use them correctly. It is important to not overspend with credit cards. Credit card debt that comes with high interest rates can make that debt spiral out of control quickly. If you find that you need help with your credit card spending, consider signing up with a legitimate licensed debt or credit counselor. Such a professional can help you uncover the reasons for your overspending ways and draft strategies to combat them.

Choosing a Credit Card

View Resource Choosing a Credit Card
The perks that come with some credit cards can be very rewarding if you use them correctly. Applying for a couple of good cards that have a reward system in place can get you things like free hotel stays, free flights, cold hard cash, and more. These credit card reward programs can be so good that often people will apply for a bunch of cards all at once to take advantage of them, racking up the points to earn frequent flyer miles and other perks. Types of Reward Cards The most popular types of credit rewards cards involve earning points, receiving cash back, redeeming for gift cards and merchandise, and receiving discounts. Points This type of credit card assigns you with a certain number of points for every dollar you spend. Typically, it falls under a 1:1 ratio with certain categories offering you extra points. You can redeem these points for different types of rewards including dining, cash, and travel. These point systems can be complex since you are not working with actual dollar amounts. Point conversions can sometimes be perplexing and tricky in some cases. Cash Back Cash back reward cards are fairly common and popular. According to a recent survey, 63 percent of the people surveyed chose the cash back option. While each program will have its restrictions and specifications, the main concept of this reward system is to offer you a percentage (usually between 1 to 6 percent) of cash back on the purchases you make throughout the year within a certain category. There are usually annual limits attached which mean you might not be getting the high percentages you think you are. There can also be a lot of harsh restrictions attached to them, which are sometimes even rotated. That can make them confusing. Some of the popular cash back categories include spending for: Redeeming Points for Gift Cards/Merchandise Gift cards are a highly functional and convenient option and in some cases, credit card companies partner up with retailers to offer you other types of discounts in addition to gift cards. This can provide you with even more savings. Discounts This is your basic discount reward program where you can cash in your rewards to obtain discounts on different services and products. Best Tips If you are looking to make the most of your reward programs, there are some tips you should follow which include: You should stay up-to-date on all the latest deals to maximize your reward perks. Credit card companies often launch new cards, change their bonuses and remove old programs on a continual basis. Being Responsible and Wise with Credit You can get much value from credit card reward programs when you use them wisely and responsibly. You should always pay your balance off every month to avoid those interest rates and late fees. Choose rewards that suit your lifestyle preferences. For instance, receiving airline miles would not do you much good if you do not travel much or like flying in airplanes. Make sure you research all reward programs and align a program with your goals, lifestyle and brand/vendor preferences. Also, stay in budget and do some comparison shopping when selecting reward cards. When you get right down to it, applying for a couple of good reward cards and using them wisely will help you roll in the perks. Just stay on top of the best deals and pay your balance each month and you will position yourself to maximize the rewards you get from your credit cards.

Maximizing Credit Card Rewards

View Resource Maximizing Credit Card Rewards

When making a major purchase, using a home equity loan or line of credit is an alternative to financing offers often provided by a seller or manufacturer. In such cases, buyers often have the option of taking the seller-provided financing offer or a rebate on their purchase. Taking the rebate and using the equity in your home may provide a better alternative to the seller financing.

Using Home Equity for a Major Purchase

View Resource Using Home Equity for a Major Purchase
If you are in the market to buy a new home and have less than a 20 percent down payment, you are usually required to buy private mortgage insurance. Overview of PMI Private mortgage insurance (PMI) is a mandatory mortgage insurance you have to pay when you take out a conventional loan. PMI protects the lender in the case you cannot make your mortgage payments. The lender arranges the PMI, and private insurance companies provide coverage. It is usually required if you take out a conventional loan, but you have a less than 20 percent down payment of the purchase price of the home. It is also required if you are refinancing your house, but you do not have at least 20 percent equity in your home. PMI typically costs between 0.5 percent and one percent of the full loan on an annual basis. Therefore, if your loan is $150,000, you could be paying as much as $1,500 a year (or $125 per month) in private mortgage insurance — presuming a one percent PMI rate. Avoiding PMI There are several ways to get around PMI. Sometimes lenders will offer conventional loans that don’t require PMI if you have a small down payment. With these loans, you may pay a higher interest rate, which can often be more expensive than the PMI itself. That depends on several factors, including how long you intend on living in the home. Not paying PMI and paying more in interest rates could affect your taxes, so it is a good idea to talk to your tax advisor before going this route. Another option you have if you have a small down payment is taking out a different loan like an FHA loan. Loans like this could end up being more or less expensive than a PMI required conventional loan depending on your down payment, credit score, general market conditions, and lender. The best way to avoid PMI is to save up your money until you can put 20 percent down on the house. PMI is not required if you pay the 20 percent down. Paying the 20 percent may also lower your interest rate. Getting Rid of PMI Once the principal balance of your loan drops to 80 percent of your home’s original appraised value, you can ask to have the PMI canceled. Note that you will have to be current on your loan once the balance reaches 78 percent to get the PMI removed. The steps you can to take to cancel your PMI sooner include:
  1. Refinance: To have PMI removed, you will need at least 20 percent equity in your home. If home prices in your area have been noticeably increasing, you will have built additional equity in your home. Refinancing with a better loan-to-value may put you past the 20 percent threshold.

  2. Have your home appraised again: To see if you now meet the 20 percent equity threshold, some lenders may allow for a new appraisal rather than going by the original sales price.

  3. Make prepayments on your loan: Even small payments a month added to your regular mortgage payment can help you get your loan balance down quicker.

  4. Remodel: Consider adding a pool or an additional room to increase the market value of your home. Then ask your lender to use the new value figure to recalculate your loan-to-value ratio.
When the market is experiencing near record low mortgage rates, refinancing will not just eliminate your PMI but will lower your interest payments each month as well. You can still buy a home even if you do not have 20 percent down. Conduct research to learn more about how PMI works and when you will be able to get rid of yours.

About Private Mortgage Insurance

View Resource About Private Mortgage Insurance

What is it going to take to make your business successful and reach your sales goals? Understanding the metrics that drive your sales initiatives will help you understand the effort that will be required along the way to make sure you’re on track at each and every stage in your sales cycle.

Optimize Your Sales Pipeline

View Resource Optimize Your Sales Pipeline
You’ve moved your startup from a dream on paper to an office. Now you need money to pay suppliers, market your products or services, and pay the staff. Alternatively, perhaps you are an established business ready to expand with new equipment or into new locations. It might be time for a business loan. Traditional loan sources are from a national commercial bank, a local bank, or SBA loans. Some credit unions also serve the business market. There are also other alternative sources for loans, including crowdfunding and peer funding sites. The key to getting the business loan that you want at a rate you can afford, especially a bank loan, is preparation. Reasons for getting a loan Multinational corporations, mid-size manufacturers, and small service providers all routinely apply for bank loans. Every company in business needs working capital. The most common reasons for applying for a business loan include: What You’ll Need Bank loans typically require extensive paperwork. Check with your accountant to make sure all your business financial reports are ready for the loan officer’s review. At the least, a small business applying for a loan will likely need: You should accompany these documents with the story of your business, as a way to tie it all together, and present your best possible profile to the loan officer. Talk about industry growth, your chance to partner with a major player in the field, or other reasons you are seeking the loan. The loan application package, which will also include all the required paperwork, should be filled out. If you have questions, ask the loan officer. Don’t turn it in only partially completed. What Lenders are Looking For The old saying that banks are more likely to lend to you when you don’t need the money is often true for businesses. Your firm needs to be on solid financial ground in order to qualify for a bank loan. In a best case scenario, that means you should be able to show your business has been profitable for the last three years. Primarily, there are three criteria you need to meet.
  1. The purpose of the loan must be financially sound. That means using it for speculating, for lending, for investments that are passive in nature, for gambling, or for pyramid sales are out of bounds.

  2. Have a good credit history. The principles, including you and the key members of your management team, must have good credit, personal or business, and be experienced in the field.

  3. Proof you can pay the loan back. Your business or you personally must have the assets to back the loan up. In many cases, you will be asked to guarantee the loan personally. As long as your firm has ample assets, they probably won’t ask for a lien on your home.
The loan department will examine all the paperwork in detail. Don’t be surprised if they even check your social media for clues about the state of your business. Bank loan departments are thorough. In summary, do your research, prepare well in advance of the loan, and completely fill out all the paperwork. Present your business in the best possible way, while staying accurate. The loans are available, and if you prepare adequately, you have an excellent chance of getting what you need.

Getting a Business Loan

View Resource Getting a Business Loan
The recent tax law changes have many homeowners and home buyers more than a little nervous about real estate purchasing and borrowing decisions and how they will affect your taxes. It is a reasonable concern, but one that is unnecessary for many who already have home loans and quite a few others interested in obtaining them. Like most laws, there is a great deal of confusion about what it will mean for you. Below are a few essential details you need to know. Impact of Tax Cut and Jobs Act of 2017 First, the legislation grandfathered in existing home mortgages, so the new law does not affect the mortgage interest deduction on these loans. Many homeowners are wiping more than a little sweat from their brows over this news. There are changes in store for new mortgage loans, though, some of which might be unpleasant for home buyers in high-demand markets. Second, while these deductions for existing mortgages remain unchanged, new home loans come with limits to the allowable home mortgage deduction to loan values of $750,000 or less. New Rules for Home Equity Loan and Line of Credit Interest In the past, many homeowners have taken advantage of the tax deductibility of home equity loan or line of credit interest by using the proceeds from those loans for a variety of purposes. Before the new tax law, how you used the loan proceeds did not matter. The interest on the loan was tax deductible. Under the new law, taxpayers can still deduct interest paid on home equity loans, but with stipulations. If you use the funds from your home equity loan or line of credit to upgrade or improve the property that secures that loan, for instance, you can continue to deduct mortgage interest from the loan. However, if you used the loan funds for such things as paying for a vacation, consolidating credit card debt, paying for college expenses or as alternative funds for the purchase of a new car, the interest is no longer deductible. Previously, you had been allowed to deduct the interest you paid on up to $100,000 in loans and lines of credit, regardless of how you used the money. That has changed and is true for both loans that preceded the new legislation and those that come after. What it Means to You Of course, homeowners who are interested in knowing how they might use the equity in their home moving forward, have a few new things to keep in mind.
  1. The new ceiling, or limit, for combined mortgage and home equity or second mortgage deductions sits at $750,000. That sum that is reduced considerably from the previous limit of $1.1 million.

  2. How you use the money matters. If you are getting a home equity loan or second mortgage to make improvements to your home, then it is acceptable to deduct those interest payments. However, if you are using them to fund vacations, purchase cars, pay for your kids to go to college, or even to pay off medical bills or credit cards, then you receive no deductions for mortgage interest paid.
The bottom line for you, as a consumer and homeowner, is that you are only able to use the funds from the home equity to reinvest in the home. That can include a variety of actions, such as: You can choose to do any of these things that will add value to your home as long as it falls within IRS rules defining capital improvements to the home and does not exceed a combined total indebtedness that is greater than $750,000. You should also know that the new rules concerning home equity lines of credit may be beneficial to you. Under the old law, there was a $100,000 cap for home improvements. You could deduct no more than the mortgage interest on this amount, regardless of how much you paid for your updates and renovations. Under the new law, it can be any amount up to the limit for the combined total, which is $750,000. That means if your mortgage is $500,000 and you completed $250,000 in renovations, you can deduct the interest on the full amount of your mortgage and your home equity loan. One final note: As IRS regulations and guidance for the Tax Cut and Jobs Act are still being reviewed and issued as of March 2018; taxpayers should monitor the IRS’s Tax Reform page and work with their tax accountant as needed.

What Now for Home Equity?

View Resource What Now for Home Equity?
The convenience of plastic, whether in the form of debit or credit cards, is hard to beat. They both offer advantages, yet have significantly different features and uses. Here is what to consider when deciding if you should make a purchase using a credit card or debit card. Credit or Debit? What’s the Difference? Although banks and credit unions issue both debit and credit cards, they are similar in that they look alike and belong to the same networks, such as Mastercard or Visa. However, there are important distinctions between the two surrounding debt. A credit card is based on a loan from the issuing entity and represents debt to you — the card user. On the other hand, a debit card is self-funded by you through deposits made to the bank or credit union issuing the debit card. In other words, a credit card forces you to incur debt, while a debit card requires you to pay for purchases of goods and services with money you already have. Advantages of Credit Cards Credit cards offer many advantages to you as a consumer. Although different cards may have different sets of terms and conditions, those advantages may potentially include:
  1. Building up your credit score, which increases your chances of qualifying for other loans, such as a mortgage.

  2. The ability to borrow funds to make purchases if you do not have the money available to pay the entire balance amount when the monthly bill arrives.

  3. Taking advantage of card incentives, like the ability to accumulate reward points, airline miles, or receive cash back when making purchases.

  4. Receiving the card’s additional warranty coverage on merchandise above what is offered by the product manufacturer.

  5. Getting insurance waiver coverage for car rentals, which could otherwise be costly if insurance is purchased through the rental agency.

  6. Having reduced liability for lost or stolen cards, provided that the customer reports the event to the card issuer promptly.

  7. Possessing the ability to dispute credit card purchases with the merchant, such as for damaged, stolen or lost goods during shipping.
Advantages of Debit Cards Similarly, debit cards also offer distinct advantages to you as a consumer which may potentially include:
  1. Enjoying no annual fees associated with a debit card.

  2. Reducing the chance that you may fall into debt, since purchases are fully paid for out of your account balance.

  3. Avoiding interest charges since you are drawing on your own savings balance.

  4. Having money taken out of your account automatically for each purchase, so it is easier to use.

  5. Setting up automatic transfers between accounts.

  6. Withdrawing cash from an ATM or with some retailers at the point-of-sale.
Like credit cards, terms and conditions may be different between debit cards, so it is crucial that you understand which of these advantages apply to your specific card and which do not. There’s no “best” card for everyone. Instead, the best card type depends on your unique financial situation, past credit history, comfort with incurring debt, projected use for the card, and what, if anything, you’d like in return for using it.

Debit or Credit Card?

View Resource Debit or Credit Card?
Ready to test your personal security knowledge? You’ll have ten multiple choice questions to answer. Click on each question to reveal the question and multiple choice answers. After you’ve completed answering all ten questions, click “Grade Me!” at the end of the quiz to see how you did.

Identity Theft and Fraud

View Resource Identity Theft and Fraud

You should be saving money in an IRA or 401k to help fund your retirement years. You can also use a Health Savings Account (HSA) to boost retirement savings earmarked to cover medical expenses in retirement. Health savings accounts are not technically retirement plans, but you can make pre-tax contributions and the money deposited in your HSA will grow tax-free. Moreover, unlike Flexible Spending Accounts, you can roll over your HSA funds from one year to the next, and into retirement. You can also withdraw HSA funds at any time to pay for current qualified medical expenses. So, as you grow your HSA account balance to meet your retirement needs, you’ll want to consider those current medical expenses in your planning.

Reach Your Health Savings Account Goal

View Resource Reach Your Health Savings Account Goal