http://articles.mychoicedeals.com/ Articles at The Article Planet en-us http://articles.mychoicedeals.com/finance/credit/getting-cash-today-or-paying-late-fees-tomorrow.html http://articles.mychoicedeals.com/finance/credit/getting-cash-today-or-paying-late-fees-tomorrow.html Fri, 11 Sep 2009 02:19:45 -0500
The following information looks at both cash advance loans and late fees to give people details that will help them make the most out of their situation.

Cash Advance Pay Day Loans: These loans are short-term financial fixes that are provided to people with no credit check, and the money is deposited directly into their bank account usually within a couple of hours or on the same day.

How do cash advance pay day loans work? People can get cash advance pay day loans on the Internet or in person with nothing more than their bank checking account and ID. The cash loan is secured using a bank account number and borrower gives the information to the lender and gives them access to the borrower's bank account. Lenders can guarantee that the loan will be paid back by having the checking account information and ability to take the money when it is due. Instead of charging interest, lenders charge a fee for the service. The service fee can vary from state to state so it's good to check with the local laws before getting a cash advance pay day loan. Most states have regulated fees between $15 - $25 per $100 borrowed. Which means that if a person takes out a $100 cash advance loan, they would need to pay back $115. A $15 dollar fee for the convenience of having $100 deposited directly in a bank. However, the full loan amount needs to be paid back by the next payday, or within 2 weeks, and thus the reason they are called a short-term loans. However, for a person that has to pay bills, and the bills charge late fees, paying a $15 fee instead of the late fees doesn't sound so bad, or does it?

How late fees work? Late fees are charged to people when the don't pay their bills on time. Most companies, like credit cards, will charge some sort of late fee, and the fees can range from $10 to as much as $50. Most credit companies will charge between $25 - $40, and they don't care what the balance of the account is or the amount due on the bill. This means that even if the amount owed is only $25 and a person pays late, the credit companies will still charge the same late fee. In addition, if a person has a couple of these types of accounts due and doesn't have the money to pay them, they will be charge several late fees that could total as much as $100 or more. In addition, they still need to pay their bill that is due, but is now due at more money. Plus, when a person is near their credit limit, and they pay late, the credit company charges the late fee on top of their balance, and if the fee puts the account over the limit then the person will be charged an over the limit fee as well. This means that not paying a $25 bill on a credit card could result in a $40 late fee, plus a $40 over the limit fee, for a total of $105. Now, the next bill comes due and they have to pay the $105 plus the next month's bill of $25, for a grand total of $130.

Looking at these two scenarios, the person who pays the late fees hasn't gotten anything from the money they paid. They are paying $80 in fees, and $40 in balance payments, whereas with a cash advance they would get $100 upfront to do what they want. The person can pay their $20 bill, saving them $80, and still have $80 dollars in their pocket for some fun until the next payday.

Another big advantage between cash advances and late fees is the credit history. If a person doesn't pay their bills on time it will give them negative credit marks, making it harder for them to get good financing in the future. Whereas, a payday loan doesn't go on credit report and the person is able to pay their bills on time keeping their credit history in tact. Even if a person doesn't pay back their payday loan on time, they will be charged additional fees, but it won't effect their credit report or even show up on their credit history, versus a credit card late notice which does impacts a person's credit score.

If people have to decide between getting a cash advance today or paying late fees tomorrow, the better choice would be to get the cash today and start paying bills. Credit history is not something to mess around with and not paying bills is the worst thing a person can do to their credit. In addition, the late fees charged are enough to put a person further into debt as they try to make their bills and keep up on the late fees.

Don't wait till it's too late, get cash today and pay the bills on time instead of paying late fees. ]]> http://articles.mychoicedeals.com/finance/credit/tips-on-using-your-credit-card-responsibly.html http://articles.mychoicedeals.com/finance/credit/tips-on-using-your-credit-card-responsibly.html Fri, 04 Sep 2009 22:57:46 -0500
Follow our top tips to using your credit card responsibly.

1. Learn to Budget

If you find yourself overspending on your card when finances are less-than rosy, draw up a monthly budget of income and outgoings, including repayments of any loans. That way you can see where to cut back.

2. Stick to the limit

Try not to go over your credit card limit or there will be extra charges to pay. In theory, you shouldn't be able to exceed your ‘limit', but in practice, card companies often allow this and then apply penalty fees and interest on the excess borrowing. Therefore, check the balance regularly, and if you think you might go over, speak to your provider about increasing your limit.

Note: increasing the credit card limit may help you avoid penalty fees, but your level of debt will increase, which could cause greater headaches in the long run.

3. Buy big items on plastic

Paying for more expensive items with a credit card can actually protect your purchases. How? Well, for example, if the company you bought an item from goes bust, your credit card company will refund the amount under section 75 of the Consumer Credit Act. This is because goods or services costing between £100 and £30,000 are covered by the act.

4. Pay off your balance

Try and pay off your credit card in full on a monthly basis. Most companies don't charge interest if you pay off the balance within a month so you could be using their credit for free. If you can't pay the full amount, pay as much as you can afford to minimise the amount of interest you'll pay over the long term. Always pay off at least the minimum each month to avoid any penalty fees.

5. Don't withdraw cash

Try not to use your credit card to withdraw cash. A card company's highest-interest rates are reserved for any money you take out from ATMs using a credit card.

6. Transfer your balance

Transfer any outstanding debt from a higher-interest credit card onto one with 0% interest on balance transfers. There is usually a minimum charge or around a 3% fee on the amount you're transferring, but the zero interest rate could save you money through reduced payments over the long term. But remember, the more times you do this, the more credit checks will be attributed to you, which could affect your perceived creditworthiness. You can read more about credit scoring here.

7. Set up a Direct Debit

If you're thinking about buying a house, having a good credit score could help you get a mortgage. A credit rating is built up by demonstrating fiscal responsibility through meeting payment commitments regularly and reliably. One way to do this is by consistently paying your credit card bill on time. Set up a direct debit to pay at least the minimum off the credit card bill each month. That way you won't be late with your payment and you'll avoid those nasty £12 fees.

8. Steer clear of store cards

Store cards might offer discounts on your first purchase, but the interest rates are typically much higher than normal credit cards. Many store cards have interest rates around 30%, compared to around 16% on normal credit cards.

9. Don't take out too many cards

Having too many credit cards can be a headache to manage. You have to keep on top of multiple repayments in order to avoid late fees, plus more available credit increases the temptation to spend, and therefore the possibility of debt problems. Also, lots of cards means lots of ‘footprints' all over any credit history (follow the link to learn more about credit reports). Why not return any unwanted plastic to the issuer or cut them up to reduce any temptation to spend, spend, spend!

10. Refused a credit card? Consider this alternative

If you have been refused a credit card but fancy the convenience of plastic, consider a prepaid card instead. Prepaid cards look and work just like credit cards, but it's your money you spend rather than the lender's, and therefore no credit check is required.

Simply charge the card with your own funds up to the desired amount, and then use it as you would a credit or debit card. Prepaid cards are perhaps one of the most responsible forms of plastic as it's impossible to overspend with them, i.e. you can only spend as much as you put on the card in the first place, and not a penny more. ]]> http://articles.mychoicedeals.com/finance/credit/the-bourgeoning-popularity-of-pre-paid-credit-cards.html http://articles.mychoicedeals.com/finance/credit/the-bourgeoning-popularity-of-pre-paid-credit-cards.html Fri, 04 Sep 2009 22:25:09 -0500 credit cards might be deemed irresponsible?

The O2 fee-free cards are set to change the market and have been launched in association with Natwest and Visa. The cards are only available to existing O2 customers, but each is aimed at two distinct demographics, with the Cash Manager card for adults and the Load and Go for children of 13 and over. Both are being marketed as a means to controlled spending, with the former intended to stop adults over-spending and the latter available to give youngsters the flexibility of credit cards with parents still being able to control their spend.

Of course, the launch of the two cards is in keeping with the growth of mobile banking, while more of us are connecting to our account via 3G or broadband instead of needing to visit a branch. Quoted in The Metro, Ronan Dunne said: "We believe that we are at the start of a journey towards the coming together of phone and wallet and we intend, through O2 Money, to be at the forefront of this trend."

Following O2's footsteps is Phones 4U who are also releasing two pre-paid cards but aimed at slightly different demographics. The Escape MasterCard Prepaid Card is said to be for ethnic minorities who will benefit from the assistance of easily being able to move money to their families abroad. The have also released a card for youngsters, the Neon MasterCard Prepaid Card, which allows children the use of a credit card without building up a debt.

Unlike O2's new card, the Phones 4U pre-paids do carry purchase costs, though the £19.99 price tag includes top-up credit. This swathe of new pre-paid cards seems to be seeing the credit card and already popular phone companies realigning the reputation of the credit card as an item that doesn't have to lead to debt because it simply can't be used unwisely. Yet, for those who are sure to benefit from a pre-paid credit card, such as those who have been specifically targeted, it is already clear that more money can be saved by shopping around for the best deal.
]]> http://articles.mychoicedeals.com/finance/credit/fixed-rate-savings-bonds-what-next.html http://articles.mychoicedeals.com/finance/credit/fixed-rate-savings-bonds-what-next.html Fri, 28 Aug 2009 01:03:18 -0500
Don't sit back

Crucially, if you fail to tell your provider where you want to move your money once the fixed term has ended, some will automatically move it into a maturity account which could be paying a paltry rate of interest - so you can't afford to do nothing.

Earn over 5%

Despite savings rates being slashed in recent months, the good news is there are signs of improving returns. Barnsley Building Society and a new player called Aldermore Bank have both just launched fixed-rate accounts paying 5.4%. However, both require your money to be locked away for five years, perhaps too long given that interest rates could rise sharply during this term.

Fix for the shorter term

If you're looking to fix for the shorter term, Barnsley also has a very competitive three-year bond paying 5% on £100, while Aldermore is offering a table-topping rate of 4.43% on its two-year bond, but on a minimum of £10,000.

Aldermore, like several other providers, is reserving its best rates for those with a hefty deposit to invest, putting such deals out of reach for those with smaller sums to squirrel away.
Elsewhere, the AA has a two-year bond paying 4.35% on £500, while Derbyshire Building Society has a one-year fix paying 3.75% on just £100.

Check out easy access

Don't limit your search for a savings account to fixed-rate bonds alone, as there are now some competitive easy access accounts on offer too, with the added advantage of being able to dip into your money or add to it at any time.

Alliance & Leicester and Birmingham Midshires are both paying 3.15% on balances of £1, and include bonuses for not making withdrawals for a year.

Beware of riskier products

Some savers may be tempted to boost their returns by venturing into more complex and riskier investments. But while the rates paid on structured products and guaranteed equity bonds are higher, there may be catches - so make sure you approach such deals with care.

Act fast

Given that the shelf lives of the "best buys" are likely to be days rather than weeks (as savers scramble to find a decent home for their cash), it could be a good idea to act fast to secure a competitive deal for your nest egg.

*Rates all correct as of 29/07/09
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