Over the past few years most people have realized the dangers of using a credit card for purchases. In addition to identity theft, there’s the very real risk of spending too much and going into debt. However, when traveling, whether abroad or locally, using your credit card offers a number of benefits. These benefits range from safety to saving money.
Let’s take a look at five benefits of using your credit card when traveling.
1. Rewards – Frequent flyer miles are the most significant reward you can receive when using your credit card for travel. You can really rack them up when you’re traveling and they’ll eventually end up in a free flight. Additionally, many credit cards offer rewards for using specific rental car companies and hotels. The rewards can add up to free merchandise or cash back.
2. Security – While there is a risk of identity theft when using your credit card, most credit cards offer instant cancellation and you’re not responsible for purchases you haven’t made. When traveling this is a much more secure option than traveling with cash. If you lose cash or are pickpocketed or robbed, the cash is gone. If your credit card is stolen, you cancel it and it can be replaced within 24 hours.
3. Budget – Believe it or not, using a credit card while you’re traveling can help you stick to a budget. When you use a credit card you have instant online access to your purchases and your balance. This means you can stay on top of what you’ve spent. Additionally, if you get a prepaid credit card, say with $2000 on it, then you can commit to only using that card and not going over your budget. Your vacation is already paid for because it’s a prepaid card and you can rest easy.
4. Insurance – Many credit cards offer travel insurance. This can really help you out of a bind. And some of the concierge services offered by some credit cards can actually help you plan your vacation, make reservations and find package vacation deals.
5. Finally, the currency conversion rates for many credit cards can help you get a fair exchange rate. It can help you actually save a bit of money. And you don’t have to worry about figuring out the exchange rate each time you make a purchase. The credit card company does it for you.
Traveling can be a harrowing experience or it can be a relaxing and enjoyable experience. A credit card can make all the difference. Before you head out on your next vacation, consider using a credit card to manage your trip.
There are a lot of tax benefits for home owners, some of which include deductions on expenses paid during your mortgage closing. However, there are a lot of categories included in your mortgage closing costs, not all of which are deductible. To determine which closing costs involved with your mortgage are deductible, read on.
* Points are deductible on your tax return during the year in which they are paid. For example, if you pay points on your closing costs during the year 2010, you can deduct them on your 2010 return. Points are the costs of obtaining the loan, or a loan origination fee. Most points are equal to 1% of the total mortgage.
* Seller’s paid points are deductable by the buyer as an expense if there is an agreement that the seller will pay the points on the mortgage. However, the seller is not able to claim those points on their tax return; rather the net gain on the sale of the home is reduced by the amount of the points paid.
* Interest costs are fully deductible through the first 10 years of home ownership. During the closing, you will prepay interest through the month, especially if you close in the middle of the month. Prepaid interest is deductible on your tax return.
* If you make too much money, there are limitations on the amounts that you can deduct. For matters in regards to this, it is best to contact a tax professional to assist in filing your taxes. A certified public accountant will know the limitations and can apply them to your taxes in the proper manner.
* Pro-rated property taxes are also deductible. In most cases you will have to pay pro-rated property taxes on the property at the closing. This expense is completely deductible when you file your return.
Closing costs consist of many fees totaled into one lump sum to be paid upon closing of the house. Some of these expenses are tax deductible depending upon your income and the purpose of the fees. Points, interest and property taxes are a few of the items that are considered tax deductible. To get the maximum deductions allowed, it is best to talk to a tax advisor or CPA to determine how much of your closing costs is deductible.
Many banks and financial advisors are trumpeting the benefits of refinancing your mortgage at a time when interest rates are fairly low. But there are some things to keep in mind which will make your pursuit of a better mortgage go smoother.
* Look at your current situation – Ask yourself why you want to refinance your mortgage. Is it because everyone says you should, or is it because you need to do so to drop your mortgage payments? Is your credit as good as or better than it was when you took out the first mortgage? A worse credit score could actually raise your interest rate. Is your house worth more than you owe? If so, then you may not be able to find a lender willing to take on that risk.
* Try your current mortgage holder first – If you have been a good customer, your current mortgage holder could be your best bet for obtaining a refinance. They may make you a better offer just to keep you as a customer. There also may be some advantages such as a reduction of fees.
* Investigate the interest rates – Shop around and find out what the best interest rate is that you can get with your current credit and income. Your rate may not be the one advertised by the lender and don’t forget the PMI, points, and other factors. It makes no sense to refinance your mortgage if you are going to end up paying more in the long run.
When you add up all the factors, if your new interest rate will be less than half a percent lower than your current one, then you are better off staying with what you have.
* Pay down your mortgage – If you owe more than your home is worth, you will probably not be able to refinance in a tight mortgage market. If possible, pay down your mortgage by several thousand dollars over the next few months before attempting to refinance. Your chances of refinancing, and of reducing or eliminating PMI, should be better afterwards.
* Wait it out – Even though everyone is touting the benefits of refinancing, you might find it’s not worthwhile to you. If you plan to sell in a year or so or if you can’t get a better deal, then just wait. Selling in a few years could net you more profit if you continue making your normal payments now. If you aren’t selling but have paid down more of your mortgage and improved your credit rating, you could get a lower interest rate even if overall rates have gone up.
Refinancing your mortgage can be frustrating, but keeping these tips in mind will help to smooth the process.
Do you need to save some money for a big purchase or recover from a large bill you just paid? Perhaps you just want to gain better control of your spending and get into serious frugal living. Having a frugal No Splurge Month could be the answer for you.
A frugal No Splurge Month is when you designate a month where you won’t spend any money on anything that isn’t absolutely essential. There is no spending money on anything you don’t legitimately need. When done as a family, this is a great way to save some money and learn more about what you can really live without.
Before you decide to stop spending unnecessary money, you will have to make a plan. Otherwise, old habits will probably take over and your frugal No Splurge Month can easily be derailed. Determine that you WANT to get into frugal living.
First of all, pick a month that will realistically work for you and your family to not splurge. You’ll probably want to avoid months where you are celebrating a major holiday or taking a vacation. Also, plan it for a month when you won’t have unexpected genuine needs, like when the kids go back to school.
When you have your month selected, plan how you will handle specific situations that will arise during that month. For example, if there is a child’s birthday party in the month you’re deciding not to splurge, decide ahead of time how you will handle that. That will help you stick to your no-splurging plan.
It might also help for you to set a budget for the month. Better budgeting will help you stay focused in your spending. You may want to put away your credit cards during this time too. Having your credit cards close at hand makes it easy to follow to urge to splurge when it strikes.
In your frugal living planning, be realistic while creating your better budgeting plan. Acknowledge that unexpected yet legitimate expenses may arise, no matter how well you plan. You may want to set aside a certain amount cash to cover those. You can still keep costs down by putting only a small amount of money aside, and any surprise expenses have to come from that amount.
Before you start your frugal No Splurge Month, it’s essential to talk about it as a family. With everyone on board, it will be easier to avoid needless spending. Decide as a family what you are allowed to spend money on. This may be a good time to talk about the difference between needs and wants. If you explain to everyone what you’re doing, and the purpose behind it, they will be more helpful and not ask for things that you haven’t agreed on beforehand. Kids may even view a frugal No Splurge Month as a fun challenge and hold you accountable for your own money spending.
Having a frugal No Splurge Month is a great way to get spending money under control and find out what you really can live without. By planning ahead and involving the whole family, frugal living can be a success for everyone involved.
With the number of foreclosures growing each month, the number of homeowners having nowhere to go is growing as well. Many cannot afford to pay rent and are terrified of the prospect of moving — to nowhere. If you are finding yourself in this situation, there are ways to delay the foreclosure of your home, sometimes even for a year or more. By living rent and mortgage-free for that time, you could be able to get back on your feet, save up a rent deposit and get moved on your own terms.
Even without using any delay strategies, you will have a few months after you stop paying your mortgage before any type of proceedings, other than late payment notices, are started. Legal documents have to be filed and a ton of other steps must be taken by the banks in order to evict you from your home. Here are some tips on ways to delay the process even longer.
1. Don’t ignore them – As tempting as it may be to ignore your creditors, it is the wrong thing to do when your home is on the line. Talk to them; tell them you are having difficulty. Often this can buy you at least a few more months. Ignoring them also removes your right to fight the proceedings.
2. Hardship letter – Once they start sending you foreclosure notices, send them a hardship letter. State the reason that you are unable to pay your mortgage at this time, whether it is due to loss of a job, divorce, death of the family’s breadwinner or illness.
3. Court appearance – You can demand a court appearance over the foreclosure, even if the bank tries to avoid it. Depending upon where you are located, it can take months for a court date to come up.
4. “Produce the note” – Demand that the original signed mortgage be produced. Without it the bank can’t legally evict you. This alone could keep you in your home for a couple more years! Often the lenders aren’t sure where they have filed the original note, or they have sent parts of it to this office or that office, and even sold parts of it to their underwriters. It can be next to impossible for them to locate the document.
When you demand they produce this document, do so in writing and by phone. By phone so you know they heard you and by writing so you can prove you demanded it. Bring it up in court when the time comes as well.
5. Simply stay put – Remain on the premises as long as possible. Chances are the foreclosure process will take a long time, so even if they come knocking you probably still have some time. You might, however, want to consider packing up your most precious belongings and putting them in storage in case you have to move quickly with little notice.
No matter how far behind you are in your mortgage, you have time to get a handle on your life situation and move along on your own terms. Don’t let the lender bully you into moving out before you must. Fight the foreclosure, take them to court, demand that they produce proof that they own the property and stay in the house as long as you choose to. It is possible to delay foreclosure until you can get your life back on track.
Ah—freedom! The long-awaited escape from childhood and into the world of being an adult. Saying goodbye to Mom and Dad and heading towards your first college dorm is a thrilling adventure. Unfortunately, being an adult brings not only freedom, but a huge amount of responsibility. Don’t screw up by making financial mistakes at the brink of adulthood.
Did you know that college students tend to rack up thousands of dollars in debt each year? And that’s not counting student loans! Student debt is even one of the leading reasons that college student drop out.
Here are some common mistakes that many college students make with their finances:
1. Not Having a Budget
A budget can be a simple thing, especially when the cost of housing is not on your list. Without it, you could easily blow through $5000 in the first month of school. To set your budget you need to break down how much spending money you have, whether it’s from your parents, your savings or a part-time job. Then ask yourself what you have to buy — such as meals, clothes, notebooks, etc.
Figure up how much those items will cost you, and give yourself some extra padding on them in case your figures are low. Now what is left? That is the amount you can spend on extra items like Friday night fun, extra clothes, and a spring break adventure. If it’s not enough, then consider ways to earn some money while in school. Even if it’s mowing grass or babysitting, things you probably did plenty of in high school, it is a source of income and can help you enjoy the fun side of college a bit more.
2. Accepting Credit Card Offers
Your parents may have provided you with a credit or debit card to cover your basic expenses, but you will also be slammed with credit card offers upon entering college. These are so tempting to use for nights out with friends, for lunch at McDonald’s every day, to impress that cute girl in Freshman Orientation, and even to head to the beach with your BFF for Spring Break.
But doing so will easily rack up thousands of dollars in debt — debt that could end up causing you to drop out of school. It’s not worth it, so don’t go there. Just walk on past them or throw them away.
3. Using Student Loans like Free Money
Many college students seem to confuse student loans with scholarships or grants — funding that doesn’t require repayment. But student loans are exactly what they say they are — loans! They carry a low interest rate and they usually don’t start accumulating interest or require payments until you have graduated, which are good things. But don’t think that means you can take them out and use them for anything you want and not face consequences.
While it may be better than credit card debt, accumulating tens of thousands of dollars of student loans will burden your post-graduate life. Keep student loans at a minimum or avoid them all together. Find alternative ways to afford your college lifestyle and tuition.
You can have a fun, rewarding and successful college experience without falling into financial disaster. You simply have to avoid the financial mistakes that your friends may be making. Being responsible financially now will also make you a better candidate for that fabulous position you want to land when you graduate.
What You Need to Know About a Bad Credit Mortgage Refinance Loan
Refinancing a home loan when you have bad credit is no easy task these days. But with financial pressures, loss of income, an ARM that is about to adjust to a frightening level or just because you think you could get a better interest rate, the idea is one to consider. There are a few things you need to know before rushing to the bank to refinance, though.
* Value of your home – No matter what the condition of your credit, it’s difficult to refinance a home for more than its current market value. Whether your home’s value has dropped with the market, has been significantly damaged by fire or storm, or if you think the value has increased, you need to know what it is currently worth.
With bad credit, the maximum you can expect to refinance for is 90% of the value. If you are under water with a mortgage higher than your home’s value, you may find some options through alternative funding sources.
* Be prepared to qualify – Before you apply, look over your situation. You should have fairly stable income and employment history and be able to prove it. Your income should be enough to cover the mortgage; these days lenders like to see your debt and housing expenses total no more than 40% of your income.
* Check your credit score – You can obtain a free credit report at www.AnnualCreditReport.com. Look it over carefully. Take care of any small outstanding debts, resolve any mistakes and investigate any irregularities well before you apply. Your credit score will have a direct impact on your ability to qualify for a refinance and on the resulting interest rate.
* Pay down debt – Whether you need to reduce your outstanding mortgage to bring it under 90% or you need to improve your debt-to-income ratio, taking a few months to earn extra income and applying it towards your debt can pay off big time down the road. Not only could it result in a lower interest rate, but it could make the difference between qualifying or not.
* Consider the purpose of your refinance – There are two types of refinance. The first is the type that refinances an entire mortgage to lower interest or to modify payments. The second is called a cash-out refinance.
Cashing out essentially means you are getting a new loan to cover your existing mortgage plus some of the equity in your home. This allows you to walk away from the refinance with cash in hand. The cash out can be used for an addition, renovation or other home improvement, or it can be used to pay off other debt. Many people use it to cover high credit card debt, but this can be dangerous if the debt was the result of unresolved spending habits.
* Consider alternatives – Loan modification or refinance through the Making Home Affordable program may be an option for you if you have recently faced a loss of income. An FHA refinance may also be available for you now, even if your first mortgage was not government-backed.
Even with bad credit it is possible to refinance your home, although it is harder and the rules are a bit different. These tips should help make the process of obtaining a bad credit mortgage refinance easier.
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