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Making Smart Credit Choices: Requesting a Credit Limit Increase

People often get their first credit cards when they are young and have not quite established themselves financially. As such, it is easy to understand why so many people find themselves with lines of credit that have very low limits. It is not unusual for credit card companies to give new account holders lines of credit that are only for $1,000 or a little bit more. As people begin to progress a bit with their finances, though, they often need credit cards with higher credit limits. This can often prove to be a stalling point for some consumers, as they are not sure how to go about requesting a credit limit increase from their credit card companies.

Use Credit Responsibly

With so many financial experts suggesting that people avoid using credit cards, it may be difficult to understand why some people would want to increase their credit limits. If someone is responsible with their use of credit, though, it is very easy to wind up in a situation every month where they are utilizing a large percentage of their existing credit. Some people like to charge purchases, like gasoline, groceries and other common items, and then to pay off their credit card balance entirely when the payment comes through. If someone only has a $1,000 limit, and spends $500 on the card, they are regularly going to be at 50 percent credit utilization. That is something that can lead to a lower credit score. Suffice it to say, that everyone should use their credit responsibly and should make efforts to pay off their balances in full – or as close to that as possible – every month. Only then, should you seek to get an increased credit limit.

You’re Not Asking for a Favor

People often get intimidated when calling to talk to representatives from their credit card companies. They believe that if they say the wrong thing, they will get turned down flat, or that if they don’t mind their p’s and q’s that they will wind up getting slapped with a higher interest rate or something. Nothing could be further from the truth. You are the customer, and they are making money from supplying you with a line of credit. You never have to feel nervous about approaching a credit card company, be it to ask for a different payment date, to negotiate a lower interest rate or, in this case, to ask for a higher credit limit.

It’s Easier than you think

Most of the time, you will not even have to speak with anyone to get this done. All the major credit card companies have online portals that allow you to access your account. Typically, there is a link that you can access once you are signed in that will allow you to request a higher balance. Use this link. You will be taken to a form that asks you the reason for needing a higher credit limit. For example, the company may want to know if you are doing so to transfer another balance or to make a large purchase. Be honest, and fill out the form entirely. If you qualify, you will get a notification from the credit card company.

However, if you get turned down, you may want to call their customer service department directly. Speak to the representative professionally, and explain why you need a higher balance. If they turn you down, ask to speak to their manager or supervisor, then repeat your request. It may take a couple of calls, but if you persist, and have a valid reason for needing a higher credit limit (like the fact that you are making a lot more money now than you were when you got it, and want to avoid high credit utilization) you should be successful.

Walmart Announces New Tax Refund Cash Pickup Service

Every year as January comes to a close, people begin filing their tax returns. With this in mind, you can always count on Walmart to do what they can to turn a profit. This time around that profit may come in the form of their new service which allows consumers to forego a cash refund check with the ability to pick up their refunds in cash. As of January 20th this service is readily available and it goes by the moniker Walmart Direct2Cash. This new service promises to save customers money and time in comparison to traditional tax refund services.

Walmart is joining up with TPG, a Green Dot Company, along with Republic Bank & Trust Company, an FDIC member, two leaders in the tax-related financial service industry, to provide the Walmart Direct2Cash as a new option to millions of their customers. There are more than 25,000 tax preparation locations that are using software that directly interfaces with Walmart Direct2Cash, and this service may be provided for no additional fees, other than the initial $7 that is charged when customers file their taxes. Walmart is not charging any fees for refunds claimed at their locations.

Daniel Eckert, the Senior VP of Services for Walmart U.S. said, “know tax refunds can be one of the largest financial payouts of the year for many of our customers, and the last thing they want is to wait for their refund check to arrive and then spend money on unnecessary fees – in many cases upwards of $70 – to cash it. By skipping the check and choosing this new service, customers will not only save time, but also keep some extra cash in their pockets – two things Americans can always use more of.”

People are always looking for more convenient alternatives to the things that they already do. It seems that Walmart Direct2Cash will offer the convenience and security that consumers need, and allows everyday people to get their full refund amounts in cash, instead of a check. The government all too often mishandles refund checks, plus checks that are mailed are subject to theft, fraud and other problems. These issues can cause people to experience delays of weeks or even months while waiting for their yearly tax refund checks. With the ability to simply drop by the local Walmart to get their cash, people have an option that is a heck of a lot more convenient than the traditional refund delivery option.

When people choose the Walmart Direct2Cash option, they can also save a considerable amount of money on fees, compared to what they have to pay for the more traditional tax refund check cashing options. Take, for instance, a person who has received the average tax refund check for $2900, and who chooses to use a check cashing provider that charges 2 percent to cash checks. That fee alone could add $20 to the process of cashing a refund check; an amount that would be avoided if that same person were to use the flat rate fee charged by Walmart Direct2Cash.

Another benefit to Walmart customers comes in the form of the Jackson Hewitt tax consultants working at some participating locations. These consultants offer free tax filing assistance to customers to find eligible health care options that exist under the Affordable Health Care Act. These services help to complement the existing Walmart Healthcare Begins Here program, which provides basic health insurance guidance to customers. All of these new services go hand-in-hand with each other and provide additional revenue to Walmart, while making the entire tax refund service easier to get through for everyday consumers.

A Seemingly Small Financial Emergency may be too much for Most Americans to Deal With

File this under bad news for the average American household: The majority of people in this country don’t have enough money saved up to deal with seemingly simple to pay for financial emergencies! Yes, most folks out there would have to seriously scramble if they had to suddenly pay for a car repair or medical bill that might cost anywhere from $500 to $1,000. This tidbit of information seems to indicate that most folks are living from one paycheck to the next, with very little financial wiggle room. An illness or car problem could prevent these people from having enough money to pay their monthly bills. A recent study found that only a little over 20 percent of people believe that they be able to deal with a financial emergency by cutting down on other expenditures.

An additional 15 percent of those surveyed said that they would have to get through a temporary financial setback by borrowing money from family members. Another 15 percent said that they would be forced to use their credit cards to get by. These statistics line up pretty well with findings from other studies done in recent years. The bottom line is that many Americans are in a financially difficult spot. Even though consumer confidence stats seem to show that consumers are feeling positive about the job situation in this country, the majority are still not putting money away regularly to deal with financial problems down the road.

A 2015 study conducted by the Federal Reserve used data that studied the financial health of U.S. households. It concluded that only about half of Americans regularly put money into a separate savings account for the future. Back in 2012, the repercussions of the Great Depression were still being felt by many people, and the savings rate in the country got all the way up to 11 percent. It fell again to 4.6 percent by the summer of the following year and hit 5.5 percent by the time winter rolled around. Before the 2008 financial recession most Americans seemed to feel financially stable. Back then, the savings rate reached a dismal rate of only 1.5 percent. This was during a time when people were using the equity in their homes like ATMs. This winded up getting a lot of people in trouble when their home values began to take a hit.

In the post-recession world, consumers have been trying to rebuild their financial futures. Millions of people lost jobs and found that access to loans and credit cards were difficult to come by. As the pressure started to die down a bit, these consumers have started to spend money more freely. According to the Federal Reserve, in 2014 just 47 percent of households in the country indicated that they were saving money for emergency expense. And if those folks were likely to experience a financial windfall, of say an extra thousand dollars, they would have been more likely to spend it than to save it.

Whether the next financial crash comes in just a few months or far in the future, Americans need to get educated and prepared to deal with financial problems. It doesn’t take a worldwide market crash to cause financial chaos in your home. For most Americans, simply dealing with life’s little financial emergencies may be enough to cause serious problems. Make saving money a habit. Pay into your savings before you do any spending, and you can make sure that you are at least financially prepared enough to deal with the most common types of money problems that always seem to arise at the worst possible times.

The Most Effective Methods to Repay Student Loan Debt Faster

One of the most difficult thing that millennials have to deal with, when it comes to their financial future, is the very real burden of paying of student loans. Being stuck with these loans often prevents young graduates from investing money or even getting their own homes. In a nutshell, student loans often feel like financial anchors that will never go away to the people who are stuck paying them off. In fact, the Federal Reserve Bank recently released a report that tallied up the average outstanding college loan balance at a whopping $24,301 – with 10 percent of borrowers stuck with debts that exceed $58,000.

Are you looking for tips on how to pay off your student loans faster? What follows are some tips that financial advisors often pass on to their clients to help them pay off their student loans, while maintaining a semblance of a normal life.

Consider Your Student Loan to be Like a Mortgage Loan

If you have a good job and are bringing in a steady income, you can treat that student loan debt the same way you would a big mortgage. Make efforts to make larger monthly payments. This helps to reduce the loan principal at a faster rate. If a student had $25K in student debt with 6.8 percent interest fees and a 10 year loan term, the payment each month would be about $288. However, if the borrower were to pay back $700 each month, the loan would be paid off completely in just a little more than three years. Paying down the principal on loans with larger payments allows borrowers to enjoy paying less interest on the loan.

Create a Plan to Eliminate Student Debt

Too many graduates just pick away at their student loan debts and complain about them to anyone who will listen. Instead of taking this approach, create a detailed plan to get rid of that debt that is hanging over your head. Break down the total amount that you owe, and come up with 3 and 5 year plans to help eliminate the student loan debt. You should break out your budget while you do this, so you can find other expenses that can be reduced or eliminated, so you can throw that money at your educational debt instead. Map out the next few years of student loan payments in detail, and then break down the large loan amount into smaller, more manageable monthly chunks to make the debt seem less overwhelming.

Set Up a Student Loan Repayment Account

It’s always possible for people to save a bit of extra money every month. Even if you can just get an extra $100 together after all the bills are paid, you can deposit that extra cash in an account that is completely dedicated to paying off your student loan debt. Establish a separate account that is ONLY for saving funds to pay off the educational debt. If you put the extra cash in your existing checking or savings account, it may be too tempting to spend the cash on other things.

Once you get your student loan debt paid off, use that extra money each month to invest and plan for the future. You worked hard to get your education and to pay off the loans that helped you to afford that education. When you are free from the educational loan debt, you’ll be able to breathe easier, and you’ll be able to get on the fast track to saving money for a better financial future.

The Facts about Payday Loans for College Students

The college experience is, for many, the first time that a person strikes out on their own and achieves a greater measure of independence. Oftentimes, though, students are not prepared for what it means to be somewhat “financially independent” when they are also just getting started and trying to earn a degree. There is no doubt that many college students, even those who come from well-to-do families, often find themselves broke and in desperate need of cash. This all begets the question of whether or not payday loans for college students are a good financial alternative.

People who are strapped for cash often find that payday lenders are their only alternative when they need to get funds for emergency expenses. There are tens of thousands of lower income, working class households in this country that depend on the services that payday lending companies provide. It should come as no surprise, then, that college students are seeking out payday advance loans at a higher rate these days. Many college students are on their own, as it were, and they oftentimes cannot turn to their parents for any extra cash. Mom and dad are probably already paying a lot for their offspring’s college education. And with so many college students being young and not having a proven track record with credit, college students often have very low credit scores.

A low credit score can immediately disqualify a borrower from getting loan approval from banks or credit unions. This does not, however, negate the fact that students need to have access to cash to get by from one week to another. There is food to by, expenses to pay and a whole host of other financial obligations that college students have to deal with; just like the rest of us. But is seeking a payday loan the best path for college students to take when they need access to fast money for emergency expenses?

The Right Kind of Payday Loan Applicant

Everyone really has to make their own choice about whether or not they should get a payday advance loan. But there are some criteria that student applicants should be aware of if they are planning on getting a payday loan. Here are some of the things that students should consider before they apply for a payday cash advance loan:

  • Is the student borrower employed? Payday lenders only provide loans to people who are employed and brining in a regular income. Because payday loans are typically paid back from the pay check of an applicant, there is no use in students without jobs applying for these types of loans.
  • Does the student have a checking account? Payday lending companies typically use either a postdated check or an automatic withdrawal from a borrower’s bank account. Any student who wishes to get a payday loan should make sure that they have a valid bank account.
  • Is the financial need relatively inexpensive? Payday lenders typically provide loans that run between $100 and $1000. In other words, payday loans shouldn’t be used to pay back student loans or to take care of larger debts. Typically, these types of loans are used to help pay for things like car repairs, emergency medical bills or simply to give the borrower enough cash on hand to get by until they get paid at work again.

Students should consider all of the information that we just shared to determine if they can/should get a payday loan. Payday loans do help young people to understand how important it is to pay back debts on time, and when used responsibly they can be a great financial help for working students who need fast cash for expenses.

Most Debt Collection Cases Reportedly Closed Amicably

The Consumer Financial Protection Bureau – CFPB for short – documented some very interesting information in their recent semi-annual report to Congress. It turns out, according to exhaustive research done at the CFPB, that the majority of consumers did not dispute debt collection company responses. The CFPB received roughly 85,000 debt collection complaints since the summer of 2013. This information was also included in their recent report that is required as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The most recent semi-annual report was the seventh posted by the Consumer Financial Protection Bureau. And like the sixth report that came out at the end of 2014, the CFPB noted that, “ “As we continue to emerge from the continuing effects of the devastating financial crisis of 2008, we find that debt collection is central and cuts across virtually all credit products: credit cards, mortgages, student loans, payday loans and other consumer loans. Currently, about 30 million consumers – nearly one out of every ten Americans – are subject to debt collection, for amounts that average about $1,500 each.”

The CFPB report went on to say, “Many companies in this industry play by the rules, but others cut corners and seek to gain an advantage by ignoring the rules,” according to the report. “These bad actors are a detriment to every company that is faithfully following the law, and their actions harm consumers.”

Of all the complaints that were filed to the CFPB, 34 percent were complaints about debt collection actions. This report happened to track complaints that were logged between April of 2014 and March of 2015. The addition of debt collection complaints began in July of 2014, by allowing consumers to post complaints in the CFPB’s complaint database.

The most common complaints about debt collection practices were focused on continual efforts by collectors to collect on debts that consumers did now owe on. These types of complaints accounted for about 38 percent of all the debt collection complaints that the Bureau has received. Other cases involved consumer complaints about information being provided to credit reporting bureaus. These complaints indicate that people only learn about accounts that have gone on to debt collection companies after they check their credit reports.

There were also quite a few complaints about the tactics that some debt collection agencies use. 19 percent of the logged complaints included information that indicated these agencies call too frequently or at bad times of the day. Additionally, calls made to places of employment seem to be a major source of contention amongst people who have filed complaints to the CFPB’s database.

Beginning on the first of June, 2015, the Consumer Financial Protection Bureau has already received well over 600,000 complaints. The most common topics of these complaints are issues with mortgage loans and debt collection practices/agencies. It will be interesting to see how all of the different categories shake out in the next semi-annual report that the CFPB provides to Congress. We can expect to see that report some time in December. It is a positive trend to see that people are actually taking action and reporting their complaints to the CFPB. While the Bureau certainly isn’t the ideal body to police most financial industries, the reports to Congress may help with some much-needed financial service reforms in the future. The data provided so far really does show that as much as people complain about debt collection companies, they still go out of their way to handle these issues in an amicable manner.

How to Save Money on your Cell Phone Plan

 

When it comes to saving money cell phone contracts are not usually your best option. It may seem like you get a good price on your phone when you sign up for a two year agreement, but you wind up paying more than the cost of the phone over those twenty four months. It only makes sense, then, that prepaid or pay as you go phone plans are beginning to become more popular.

Prepaid cell phone plans are more flexible and affordable than the traditional cell phone agreements that the big carriers like to sign their customers up for. Even if you use a lot of data or talk for hours on end every month, chances are that you can save quite a bit of money on your cell phone plan by switching to a prepaid service.

Here’s a quick rundown on how cell phone service usually works for folks in the U.S. You get a new phone that is “free” or “almost free” by signing up for a two year coverage contract. Over those two years the monthly costs of your coverage plan wind up being a heck of a lot more than that shiny new phone would have been if you would have purchased it outright. Think about purchasing a big ticket item on your credit card and then making minimum payments on your card every month. That’s pretty much how the typical two year contract winds up gouging you out of cash over the long haul.

Thankfully, though, two year contracts are not your only option for getting quality cell phone coverage. You can now get prepaid cell phone service that does not force you to sign up for a long term agreement. If you don’t use your phone all that much, you can just pay for the hours you use and avoid those out of control cell phone bills every month. And if you do use your phone a lot, there’s a good chance you can still get a cheaper plan by switching to prepaid cell phone services.

Prepaid is not for everyone, though. If you simply must have the latest, most expensive cell phone every year or two and spend a lot of time chewing up data on your 4G plan, then a prepaid plan probably isn’t your best bet. However, if you can go without upgrading your phone every 12 months, you may save a huge amount of money by moving over to a prepaid mobile plan.

When you sign up for a prepaid cell phone plan you will usually have the option to purchase a phone from the carrier. Flip phones are dirt cheap right now and the slower Android phones don’t cost that much either. If you can get by with basic functionality, then opt for one of the cheaper models. And if you already have a cell phone, many of the carriers will allow you to bring your existing cell phone with you when you purchase their prepaid wireless services. If you can’t go without the latest/greatest smart phone, though, be prepared to pony up well over $500 to get the latest models from Apple or Samsung.

Regardless of the actual phone and service plan that you choose, you have more options today – and chances to save money – than ever before. Check out the prepaid plans that are offered by most carriers and you may be shocked when you learn how much money you can save by switching over from the typical two year plan to a more flexible and much more affordable pay as you go cell phone plan for all of your on the go communications and internet browsing.

Identity Theft More Prevalent in 2013

Your identity should be just that, yours. You should not have to worry about someone trying to steal it, but that is the world that we live in. In 2013 we heard stories of identity theft, data hacking, and data theft more than we had heard in a single year leading up to it. This just shows us how bad things are getting when it comes to identity theft, and why it is more important now than ever before to protect our identities.
In the year 2012 the total direct and indirect monetary loses added up to $24.7 billion dollars. In that same year, seven percent of those who were the age 16 and over had their identity compromised at least once. Now try to think back to 2012, do you remember hearing about identity theft and data theft and hacking as you did last year?
In 2013 we heard stories about these terrifying happenings all the time. The news shows covered them, the newspapers covered them, no matter where you turned you would hear a story about someone hacking or stealing for information and identities. This is scary, it should scare everyone!
Not everyone will become a victim of identity theft in their lifetime, or when they are dead for that matter, but you should still go about your life as if you are a target. You should do everything possible to protect your identity from someone getting ahold of it as it can ruin your life should they get their hands on your information. Unfortunately as hard as you try, you may not be able to completely protect yourself from everything.
The Federal Trade Commission has provided various tips on what to do should your identity be compromised. With the statistics on identity theft that have been released about 2012, and as bad as it was in 2013, it would do everyone good to read these tips and come up with a plan should their identity become compromised.
Do not use that as an excuse to not continue to try and protect yourself. Identitytheft.org has plenty of tips and tricks that you may or may not now about protecting your identity. It seems as though the trend in identity theft is that the thieves are working harder and harder every year to get to your information so you must work harder and harder every year to protect your information.
2012 was bad, 2013 seemed to be worse, only time will tell us what 2014 will bring us in the way of identity theft and data hacking and theft. In the year 2013 identity theft become more prevalent than it was the year before, which was a bad year in itself. Never stop working at protecting your identity; once it has been compromised your life will never be the same. You will be struggling to get back what you had before you had your information stolen. So remember, identity theft was more widespread in 2013, and we do not know what 2014 will bring.

Financial Tips for Teens

Whether they realize it or not most teens need help with their financial future. Too many of them feel that they are too young to deal with it now, and that they can worry about it later in life. If they can get a start on saving money and learning how to be smart financially it will really pay off for them in the future.

The first thing teens need to do is to realize that they need to start saving now even if it is just a small amount at a time, every bit adds up. The younger they start the better off they will be. Even if they do not have a bank account yet, for whatever reason, they can still save money. They can put it into a jar and then when they do get a savings account, they can put it all in right away. Starting young is the best thing you can do for savings, especially if you have a bank account, the interest will add up quickly.

The next thing that teens need to do is to understand credit cards and how they work. They should understand why it is a good idea to stay away from them. They should also know how to use them properly if they do have one for emergencies. Too often a teen will get a credit card and not have been educated enough about it and use it too much. This leaves them with debt before they really get started with their life.

Every teen should be taught how to create a budget, how to review it, and how to revise it. They should also understand the importance of not only knowing how to do this, but why it is so important to have one. The younger they can get started working with a budget the easier it will be when they become adults. Using a budget will be like second nature to them.

Financial education is an important thing for all teens. They should look for ways that they can learn more about the world of finance so that they are better prepared for their future. There are many banks and credit unions that will teach teens about finances. Take advantage of the places that are willing to educate the teens, the sooner they learn about this stuff the better off they will be down the road.

You can never say what the future holds. You do not know what the economy will be like in ten years, five years, or even next year. It is better to educate teens while they are still young so they are able to handle whatever happens. Investing in their financial education is an investment in their future.

The FDIC’s Unbanked and Underbanked Survey

Just last month the FDIC released a new survey about the homes in the United States that were considered underbanked and unbanked in the year 2011. This survey shows how many homes were considered to be underbanked and how many homes were considered to be unbanked. The point of the survey is for policymakers to gather data to support evidence that they use in policy making.

The FDIC’s survey shows that in the year 2011 about ten million household were without a checking account and a savings account. This works out to be about 8.2 percent of the households in America today. This survey also showed that 20.1 percent of the homes in this country have a bank account of sometime but choose to use other financial institutions than their banks. These are the underbanked of the country.

Experts agree that the results of this survey show that banks have more work to do to get customers back and to bring new ones to their institution. This also shows that there is a real demand for check cashing services. These non-bank financial institutions are meeting the needs of people where banks are falling short.

Where the banks are charging fees that are getting higher and higher by the year, and more and more are popping up, check cashing services have straight forward flat fees that make it much easier for the consumer to understand and follow. Banks are adding fees to services that were previously free; they are upping the fees on the services that have fees already.

When all is said and done, check cashing companies are not hiding fees and charging their customers fees that they are unaware of and do not understand. With payday companies you are given the fees upfront. There is nothing that is hidden from the customer, they know the amount that they will get, the exact amount that they will have to pay back, and when exactly they have to pay it back.

It is easy for one to see when they look at the FDIC’s latest survey that banks do have quite a bit of competition now. They have their work cut out for them if they plan on keeping the customers they have, bring back the ones that they lost, and to bring in new customers. Payday lenders are not going to give up easily though. Customers have decided they like what check advance loan companies have to offer and are not looking to turn away from that.

We can learn a lot from the FDIC’s survey. More importantly banks can learn a lot from the survey. This shows the changes that have taken place in the banking industry and what changes may come. If you compare the surveys that the FDIC has put out it will show trends in the underbanked and unbanked. Looking at these trends from the past can help to predict the trends of the future.