Should You Apply for A Card with an Annual Fee?

Credit CardWhen it comes time to get your first credit card, or perhaps get a new credit card, take time to sit down and make a list of everything about the cards that you’re interested in.  The PROS and the CONS.  Depending on your credit level, the cards you’re interested in, the rewards available (if any), and the fees attached to the credit cards, you can either save a bundle or end up paying an annual fee that simply doesn’t make it worthwhile to get the credit card at all.  But, are there actually times when paying the annual fees on certain credit cards makes sense?

Let’s look at some of the reasons you might consider paying those annual fees:

You have a Limited Credit History:  If you’re just starting out, it’s not always easy to get a credit card in the first place.  Most of the top credit card companies reject your application right off the bat, others promise a certain amount of credit, but hit you with a hefty fee (up to half of the credit limit), and still others charge a higher than normal interest rate.

Unfortunately, many of the credit cards that are marketed to customers with limited or no credit history also charge an annual fee. However, for these types of cards, you’ll typically see an annual fee that’s less than a $100, but when it costs you the $100 just to get a credit limit of $200-$300, it’s very frustrating to say the least.  But, if your credit score is very low and you’re serious about building it up, then this may be the best way to start, so don’t discount these credit cards without considering whether it will work for your circumstances.  Sometimes, the end justifies the means.

Your Credit Isn’t Good Enough: What if your credit is less than perfect or damaged?  As a result, you may not qualify for credit cards with no annual fee. If so, you’ll most likely have to start with a credit card with an annual fee, and then work your way up to other credit card options.

The Rewards Outweigh the Fee:  There are upper tier credit cards that offer substantial rewards, but do charge a fee.  If, after you’ve reviewed the rewards, and you’re certain that you’ll exceed the amount of the annual fee in cash back or points rewards, then the card with the annual fee may be a good option for you.  Just make sure that you can easily downgrade to a no fee option should you choose to do so.  Closing a card can actually hurt your credit score, so the downgrade option is definitely one to look for when selecting a credit card of this type. 

In closing, it’s safe to assume that there are times when a credit card with an annual fee can be beneficial to you.  You just have to make sure that you review all of the terms, know exactly what you want, and what you’re getting.



It’s Tax Time Again!

Here it is, tax time again!

Figure Income TaxWere you able to save much on your taxes this year?  Or, did you fall into one of the many tax brackets where it seems you just can’t get a break?  Regardless of where your income falls on the scale, there are some things that you can do right now that will potentially reduce your tax bill.  While many of these things fall into the tax return you’ll eventually file next spring, there are a couple of things you can do to make sure this year’s return is at least as accurate as it should be.

  • If you’ve not already done so, consider having a tax professional do your taxes.  Granted, there are lots of free or nearly free options online, but the laws change so much during any given year that you should definitely consider having a reputable firm do your taxes for you.  Especially if you make a lot of money, have lots of deductions, or have made a major life change in the past year, the difference between doing them yourself and having another do them could mean a substantial amount of money.
  • Make sure you’re filing under the correct status.  Even though you might think this is pretty straightforward, there are actually three options for singles and two for married couples.  Single, but have a child?  Single is probably not the right status for you.   Perhaps your spouse passed away, but you have a child?  There’s a couple of different status options for you, too.  Even Married is not necessarily as simple as it sounds.  Did you know that you might be able to save money if you and your spouse file separately instead of jointly?  Depending on your situation, choosing your status can significantly alter your refund (or tax bill).

Now, what about next year?  What can you do differently this year that will save you money?

  • One of the biggest ways to save money on your taxes is to BUY a home.  Not only will you save money because you can deduct mortgage interest and property taxes, but you will also be building equity in something that you own.  No more paying rent (buying a house for your landlord).
  • Go back to school!  Finish your degree, take classes for work, or learn something totally new.  Many educational expenses qualify for tax breaks, just be sure to do your research in advance so you’ll know if what you sign up for qualifies.
  • Keep paying on your student loans.  You can deduct up to $2,500 in interest on your student loan interest every year, even if you don’t itemize.  So, keep paying on time!
  • Donate to charity.  While it’s always nice to make a few dollars when we sell old clothes, furniture, and such online or at garage sales, it may be more beneficial to you if you donate it to charity.  Just keep the receipts and itemize your deductions (if you qualify).
  • Make pretax contributions to a 401(k), 403(b), or 457 retirement plan.  The more you can contribute pre-tax, the more you’ll save on your income taxes.  For 2020, the maximum 401(k) contribution is $19,500. If you’re age 50 or older, you can make an additional “catch-up” contribution of $6,500, bringing your total 401(k) contribution limit to $26,000. The limits for 403(b) and 457 plans are the same.

Still think you can’t save money on your tax bill?  Remember, the more attention you pay to your finances throughout the year, the easier it becomes to save money on taxes (and everything else) when the time comes.  So, get busy!  Pay attention!  And have a great year!


Why Budget Your Money?

Do you try to stick to a weekly, monthly, or even an annual budget?  Maybe you figure since you can barely make ends meet that it’s a waste of time to even try to budget your money?   Maybe you’ve never even thought about budgeting?

Even though it may not seem worthwhile, or even important to you, budgeting your money is actually very important to your financial future.  Not only will it help you to see places where you can (and should) save money, but setting financial goals and objectives and then achieving those goals is a great way to boost your monetary self confidence.  I can almost promise you that, achieving even the smallest objective will be just the encouragement that you need to strive for the next, bigger financial goal.

Budgeting is a powerful financial tool even for those of us with little money – but it’s not foolproof.  Emergencies arise.  Unexpected expenses.  Income decreases or increases.  So many factors can have an effect on your budget, but if you don’t HAVE a budget, there’s absolutely no way to prepare, endure, or recover from some missteps. And you certainly won’t make near as much headway toward reaching your longterm financial goals as you would if you simply sit down, analyze your spending, and create a workable plan to stay on track.

Here are some of the best reasons for you to create and stick to a budget this year:

  • Keep Your Eyes on Your Financial Goals:  Having a plan for your future involves sticking to a plan for today, but if that plan seems too far out there, it’s really easy to lose sight of where you want to be.  Being able to see where you are, where you’ve been, and where you want to be (and WHEN you can expect to get there) is crucial to your success. If you can’t see it, it will be that much harder to work toward it.
  • Curb Your Spending:  It seems like there’s always something that we think that we want or need out there, and even though it’s really easy to do so, we shouldn’t just pull out that credit card and slide it through the machine every time we’re tempted.  If for no other reason, having an analysis of your current (and past) spending habits (and needs) can keep you from adding yet another bill to an already tight budget.  Once you know what your bottom line is each month, I can almost guarantee you won’t want to see that number decrease!
  • Emergencies:  One of the most important things you can do when you create your budget is to allocate a certain amount of money each week (or month) toward setting up an emergency fund so that you can get through the next financial crisis, whether that crisis is illness, job loss, an accident, or something else entirely.  With the right amount of time and planning, you will be better suited to survive the next financial emergency that you face.
  • Cut Unnecessary Expenses:  As you analyze your finances, you will gradually accumulate enough information (and knowledge) that you’ll just naturally see areas where you can cut back or eliminate certain expenses… for example, cutting your cable subscription and streaming instead can save lots of money, maybe theres a gym membership that’s still coming out of your checking account on a regular basis that you’re not using, or maybe it’s something else entirely.  The point is, if you don’t pay attention to it, you may not realize that you can eliminate it.

Truthfully, these are just a few of the reasons for you to seriously consider making a budget and sticking to it this year –  some may make sense for you, some may not.  You may even have a totally different reason for wanting to set up your own financial plan, but the important thing to remember is that you have to have a plan.  Granted, your plan should be flexible, and you should review it regularly to see where you need to make adjustments, but you still need to have a plan if you ever want to achieve your financial goals.

Big Changes May Be Coming to Your Credit Score!

Your credit score could soon go up… or down!

Thursday, FICO announced a new scoring model that will take into account your overall debt level, including personal loans.  Previously, scoring models focused on snapshots of payment histories, however, the new model will give lenders more information about how overall credit (and debt) is managed by analyzing payments over time, including account balances (and changes) over the past two years.

Approximately 80 million of us will likely see a shift of 20 or more points, with about 40 million scores going up and another 40 million going down.  Those of us who carry a high amount of credit card debt in relation to overall credit, or with recently missed payments, could see a significant drop in our credit score.  However, those of us who make on-time payments, lower balances, and less overall debt should see a slight credit score increase.

What does this mean for you? 

Well, since two years of payment information will be analyzed, those who normally pay credit cards off monthly likely won’t be dinged as much for the occasional high balance, or those larger, one time purchases.  But those of us who consistently carry a balance will likely be the ones who will see a drop in our FICO score.

What can you do to combat a drop in your FICO score?

Obviously, paying off credit cards monthly will always result in a better score.  And if you’re unable to pay off most or all of your credit card debt?  Now is the time to start working toward that goal.  The sooner you pay off those credit cards, the less this change will impact your credit score (and your ability to secure credit in the future).

Controlling Debt While You’re in College

1. Don't wait until you finish school to start paying back your loans.  Begin immediately and skip the grace periods if at all possible.  Even if you're only paying the interest that's accruing.  . Absolutely do not wait up till you finish, or take that six-month grace period. Why do banks offer a grace period? Due to the reality that interest still builds up, and when it'' ' ' s over, they can include it onto your principal balance. That recommends your interest now has interest developed on it. Discover out the interest you'' ' ' re acruing while in school, and pay that back month-to-month. Pay back more if you can, however at the very minimum, the interest.

2. Work at your college school tech center, or for a teacher. These jobs generally pay over base pay, AND they look outstanding on a resume. Even if you'' ' ' re just grading files, it'' ' ' s cash. 3. Move off school as soon as possible. Some colleges require you to reside in a dormitory for their really first year, however not after that. If you'' ' ' re REALLY into conserving cash, draw it up and live with your moms and dads for a little bit longer. My dorm cost $12,000 a year, and I had to leave throughout summer seasons! Think about the house or condo you can get for $1,000 a month. AND you can have your own toilet!

4. Eliminate the college meal technique. Seriously. The food isn'' ' ' t that great anyway. Discover to prepare, and make meals ahead of time on a Sunday. You can freeze and microwave them.

5. But won'' ' ' t working interfere with my studying? In reality, no. Nevertheless partying will. I'' ' '' m not stating wear ' ' t go out ever and be unpleasant, however attempt to wait for Fridays and Saturdays. You can study/recover while your meals prepare on Sunday, no?

6. Attempt to keep your odd expenses to a minimum. Coffees that cost $4 a day are probably wonderful. Nevertheless, alright. Picture you go to Disney World EVERY day. After a long time, you'' ' ' d be tired and most likely think, """" wow, I have to be here ONCE AGAIN?"""" Now picture you only go once every 5 years. You'' ' ' re going to like it each time. Only get a latte or cappuchino on Fridays. You'' ' ' ll conserve $ 20 a week, which latte will taste a lot better!

7. I'' ' ' m going to appear like your mom here. However cut the drinking. Not permanently nevertheless! Don'' ' ' t buy pricey bottles of red wine all the time, and save the seasonal IPAs for vacations, not year round. Boxed red wines are the method to go!

8. Are you learning composing, psychology, sociology, or a significant that many individuals say isn'' ' ' t going to be a fantastic future? I disagree. You want your task to be making up? Get to! Write some simple study guides for Amazon. Make up a cook book. Are you from a substantial city? Make up an evaluation of your town! If individuals are going to, a guide of Philadelphia or NYC is much simpler to continue your phone than your pocket! Individuals delight in real, ever day experiences. And you have those! Use them!

Ten Debt Facts You Should Know

There are a lot of methods you might participate in trouble financially, however among the most tough to recuperate from is charge card financial obligation. With its common high interest rate, anyone who utilizes them and doesn’& & rsquo; & rsquo; t settle the balance within the initial thirty days could discover themselves struggling.

1. You Are Not Alone.

If you feel you’& rsquo; re in the minority when it concerns credit card debt, think again. With 46% of the adult population carrying an exceptional balance on their credit cards, you’& rsquo; re in business with a great deal of people. It appears that while it is advised to pay off the balance monthly, more individuals are making it a practice of carrying it forward and paying the hefty insurance rates with it.

2. Large Balances Can Use Up To A Decade To Settle.

Utilizing your card to the max might be simple but paying it off can be really tough. Today, with the average rates of interest at nearly 17%, a $6,000 financial obligation could easily incur another $6,000 in interest in time. Often, if you pay over an extended amount of time, you will wind up paying more in interest than you provided for the purchase itself.

2. Big Balances Can Use Up To A Years To Pay Off.

Utilizing your card to the max may be simple however paying it off can be really tough. Today, with the typical interest rate at almost 17%, a $6,000 debt could quickly incur another $6,000 in interest in time. Frequently, if you pay over an extended amount of time, you will wind up paying more in interest than you did for the purchase itself.

3. We’& rsquo; re Including More Than We Are Settling.

US customers are excellent at spending however not so great when it concerns paying. According to CardHub, in 2016 customers paid their credit card companies $26.8 billion dollars, however they added $71 billion in brand-new debt. That indicates they are just paying off $38% of the quantity they in fact owe.

4. Typical Financial Obligation Owed Is Almost $6000 Per Home.

On average, American homes hold around $5,700 in unsecured debts like credit cards. This suggests that many families weren’& rsquo; t able to make a significant damage in their credit card debt, although other economic factors enhanced over the years.

5. Rates of interest Are Not Boiling down.

While you may think that the financial situation would bring down the high interest rates, however the majority of United States charge card still average 16% or greater. Contribute to that the penalty interest customers should spend for every late payment they make, and you may discover yourself paying as much as 28%.

6. One Late Payment Can Badly Damage Your FICO Rating.

Paying late is much better than not paying at all, but you will pay in other ways. If you are repeatedly late or you pay more than 1 month past the due date, your lender may report you to the nationwide credit bureau. Even one late payment can stay on your report for approximately 7 years and can bring your score down as much as 100 points.

7. One of the most Indebted are the Gen Xers.

The least quantity of charge card financial obligation comes from the Baby Boomers, however the generation that owes the most are the Gen Xers. Those born between 1967 and 1981, hold a typical credit card balance that is almost $8,000. In addition, credit rating have historically dropped lower with each successive generation.

8. One-Fifth Of Americans Hold More Charge Card Debt Than They Have In Their Emergency situation Fund.

It is recommended that everybody have on hand an emergency situation fund that will cover three-to-six months of living expenditures. Nevertheless, a minimum of 12% do not hold any emergency cost savings at all. That indicates that even if they put on’& rsquo; t carry charge card financial obligation, an emergency situation might put them into debt at any time. 8. One-Fifth Of Americans Hold More Credit Card Financial Obligation Than They Have In Their Emergency situation Fund.

It is recommended that everybody have on hand an emergency situation fund that will cover three-to-six months of living expenditures. However, at least 12% do not hold any emergency situation cost savings at all. That suggests that even if they wear’& rsquo; t carry charge card debt, an emergency situation might put them into debt at any time.

9. Men Tend To Carry more Financial Obligation Than Females.

While women are often considered more shopping oriented, it is the men that carry the most financial obligation. With an average debt load of $7,407 rather than ladies with an average debt of $5,245, it is clear who are the most significant spenders. Women’& rsquo; s debt load is a full 22% less.

10. Chances Are High That Many Will Pass Away Carrying Charge Card Financial Obligation.

Records reveal that 65% of Americans can anticipate to pass away still owing a balance on their credit card. That’& rsquo; s more than those who are anticipated to leave this earth with a home mortgage payment due. Usually, people tend to leave a balance of more than $4,000; a legacy that their relative might need to deal with.

It is clear that charge card debt is a substantial problem that Americans have yet to handle. If you’& rsquo; re dealing with charge card debt, it doesn’& rsquo; t need to be the standard in your case. It is better to do something about it now to decrease this cost and offer you a bit more financial liberty so you can really get into enjoying life.

Christmas in July

Thinking about Christmas in July seems crazy, but really it’s never too early to start planning… And yes, before you start wondering about me, I am aware that it’s actually June, but what got me to thinking about this in the first place is the fact that one of the most popular cable channels announced this week that they are actually planning to debut two new Christmas movies next month during their “Christmas in July” movie extravaganza!

When you think about it, July is really only three months, or literally 90 days before we should be planning Christmas 2019, and by the time October arrives, it likely will be too late to plan how you’ll afford Christmas this year!  So, when you look at it that way, shouldn’t you be planning Christmas in July, too?

One of the best ways to start planning your spending this year is to figure out how much money you’ll need to spend on food, entertainment, and, of course, Christmas gifts!   And if you don’t have a lot of cash?  Then you need to figure out if you’ll use your savings or if you are going to need credit to pay for this year’s holiday season… do you have enough credit?

Maybe your credit is not in the best shape?  Maybe you need to work on your credit?  If that’s the case, there are some pretty decent companies that are willing to work with you as you try to rebuild your credit.. but you don’t want to wait until October to start.

Now’s the time to plan.  Now’s the time to act.  Now’s the time to get the credit you’ll need.  And when you look at it that way, Christmas in July doesn’t seem so crazy, does it?

Check out one of these offers:

New Car Fever

Thinking about replacing that old car this year?  Maybe you’ve saved your tax refund as a down payment, or your old ride is just not as reliable as it should be, and now you’re ready to look at your options. Will you choose a brand new car, truck or SUV?  Or will you go with something that’s not quite as new, but fits more into your budget?  Regardless of what type, age, or price range you’re considering, before you even set foot on the car lot, before that salesman pressures you to sign on the dotted lines, you might want to think about financing!

Just because the dealership offers financing on the spot doesn’t necessarily mean that’s the best option for you.  Remember, in most cases, they are the ones with something to gain if you choose their financing… which means that their banks, or their finance companies, essentially work for them, not you.  Plus, you’re far more likely to take on a higher payment than you intend to if you wait until you’re ready to buy!

Instead, you need to shop car loans long before you shop for the actual car, and just like ANY loan, these days, it’s a good idea to shop online first.   Not only will you likely find more options, but you might just save a lot on interest, fees, and more!



It Really is Easy to Get Credit Cards

Even though it’s not really the “shopping” season, your mailbox is still probably stuffed with offers for loans, credit cards, and catalog offers on a regular basis.  Why is that?  Since when did it become a year round thing to “sell” us, the consumer, on a different credit card, a personal loan, or store credit card?   Well, with the advent of online shopping, the use of credit cards has skyrocketed, as has the use of store credit, catalog offers, and online loan options (home, car, personal and even payday loans).

But how do you know if you’re getting the best credit card for your credit score?  How do you know you’re getting the right card for your financial needs?   Do you need cash back rewards?  Or would a travel rewards card better benefit you?

And if your credit is less than perfect?  Would a secured credit card boost your credit score more than a store credit card?  Would you qualify for an unsecured credit card?  Do you even know your credit score?

These are some pretty tough questions when you really think about it, aren’t they?  Do you really think that filling out one or more of those mass mailer offers will get you the right credit card for your needs?

The truth is, most of those offers that land in your mailbox aren’t customized to your needs.  They’re sent out as a bulk mailing to thousands of people in your area whose credit score is likely similar to yours, based on your age, where you live, and even what most people in your area do for a living… There is absolutely nothing “custom” at all about it.  So, before you respond to one of those offers, you might just want to do a little comparison shopping.

Start with your credit score, then choose offers that best fit YOU:

Summer Vacation Plans?

Do you have plans for your summer vacation?  Or are you still trying to figure out how you’ll pay for it?

Without careful planning, your summer vacation can end up costing you money for years and years!  Especially if you’re planning to use a credit card to pay for all or part of the expenses associated with a vacation, you might just want to take a good, hard look at ALL of your credit cards.

Are any of your credit cards rewards cards?  Could you use a rewards card to pay for gas, airline tickets, lodging while you’re on vacation?  And if you do use a rewards card, what will your actual reward be?  Is there a better reward card out there?

Do any of your credit cards offer a special rate for large purchases?  Maybe there’s an interest free option that you could take advantage of?  If not, is there a credit card that you could use that does offer introductory incentives like 0% interest?

What’s your current credit card interest rate?  Is there a better credit card with a better interest rate?  Maybe your credit score has changed for the better?  If so, you owe it to yourself to compare your current cards with other offers!

Once you’ve got your financing in order, and you see what you have to spend, then it’s much easier to plan a summer vacation!

Who knows… you might have more vacation options than you thought you did!