Voices in Finance

Repair Your Credit Score By Taking Out A Credit Card – Wait, What?

Mike — Sun, 11 Jul 2010 09:38:25 +0000

This is a guest post from Louise Tillotson:

Get a credit card to repair a bad credit file – sounds like an oxymoron, doesn’t it? Most people think that the best thing to do if you have a bad credit history is simply to avoid all possible forms of credit like the plague – and I’m not here to say any different. This technique does work, and there’s nothing wrong with it. But if you want to take an active role in improving your credit score, rather than simply waiting for the bad stuff to disappear from your file, then there are other things you can do.

Previously, anyone with adverse entries such as defaults, CCJs or IVAs on their credit report found it nearly impossible to get a credit card. This got worse as the economy tightened, and now even people with a few missed payments on their files are finding themselves tarred with the same brush. And if they have no previous credit, then getting that first card is almost an exercise in futility as banks don’t want to take the risk of lending to an ‘unknown’.

But credit cards do exist which will actually help people to either build or repair their credit rating. These are called, respectively, credit builder and bad credit credit cards. Although the two are essentially similar, there are differences in the lending criteria.

The former, credit builder credit cards, are specifically designed for people aged 18 or over who have never had any form of credit in their name before. The lending bank has no idea how a person will manage their money as there are no precedents, so the APR on these cards can be rather high to reflect the risk. Approval is based on current financial circumstances and an estimate of how the person could manage their money.

Bad credit credit cards are targeted towards people who have had financial difficulties in the past, resulting in missed payments, defaults or CCJs being placed on their reports. While standard card lenders look at the past 6 years of a financial record when considering an application, lenders for ‘bad credit’ cards will also take into account the current circumstances: if the applicant’s salary has recently increased, or they have cleared off a lot of existing debt, then this will all count in their favor.

Both types of credit card carry higher than average interest rates, and they’re unlikely to have any 0% interest periods, so these cards aren’t designed for a high volume of spending. They can be thought of as a tool for demonstrating to future lenders that the owner can manage their finances and make timely repayments.

With all credit cards, it’s best to pay off your balance in full each month if you can. This will not only look good on your credit file, but you could also avoid paying the interest which, on the cards detailed above, can be as high as 39.9% APR.

[bio]
Louise has worked in the financial sector for many years. She currently works as a writer for Moneysupermarket, and writes financial articles for a number of other sites as well.

How to Avoid Serious Debt Problems

J. Hamilton Fraser — Wed, 30 Jun 2010 01:08:53 +0000

A debt problem can be much more than a matter of money since severe situations can put tremendous strains on a person’s life and relationship. There is no worse feeling than owing a large sum of money on a never-ending basis. You feel as if you’re running on a treadmill where simply keeping up actually equates to falling behind. To avoid debt, it takes careful planning and going against your natural impulse to spend money. If you can manage to stay out of debt, it will leave you to focus on the much more fruitful goal of saving your earnings.

In order to avoid serious debt problems, you really need to get a handle on your spending. And that doesn’t just mean limiting your spending because you need to keep track of every cent that flows in and out of your bank account. It can be difficult to keep such meticulous records, and frankly it’s never any fun. But there are so many ways to lose money here and there that it is absolutely essential to know what the nature of your financial situation entails.

In general, it’s never a good idea to borrow money whether it comes in the form of credits cards or instant loans. The interest you can pay alone will end up costing you money, and even making minimum payments can have you in the grips of debt problems within months. So if you do use credit or borrow money, always make sure to pay it off in a timely manner.

In terms of the money you make, it should be handled with great care to divide it between necessary spending and savings. You should always try to put a portion of your earnings into a savings account designated for emergencies. Try your best to stay away from this account and let the money inside it build over time. As for things you need to buy, take a look at those items too and see which ones you can live without. And whenever possible, don’t be afraid to shop around for the best deal because the money you save can either go into your savings, or be used for something more important.

The Present Scenario of the International Real Estate Market

J. Hamilton Fraser — Mon, 28 Jun 2010 23:06:53 +0000

The global real estate market has been a field known to make high profits over the whole of the past decade. The market prices in the international property market soared up so high in the same period and it attracted the attention of investors from all over the globe. This market was not confined to any specific locations.

However, the last year alone has shaken the fame that the international real estate market was enjoying. The market prices along with the number of real estate investors declined sharply in the past year. The real estate market has somehow made the journey through its toughest periods and currently has showed up a slow recovery. However, we must not forget the events that led to the fall of the market.

1. The initiation of the big fall started with the collapse of the U.S. stock market and the shut down of some of the biggest names in Global Investment Banking.

2. Blogging, the new marketing option had talked very high of the international real estate market and helped in attracting more investors over the decade, but the same took up a new trend and started criticizing the real estate market, which eventually led to its fall.

3. Though the economic meltdown and recession resulted in a weakening demand for real estate in popular destinations of the US, UK, Europe, etc, the same helped to rise the popularity in other destinations namely Japan, Germany, Canada, etc.

Nevertheless, we are certain that this fall was due to the effects of the recession and will die away eventually. The real estate market will climb up the ladder soon. The current situation of the weakening dollar is a good signal that real estate market will shoot up since US properties in Orlando Fl and other popular places are really cheap. In spite of the adverse effects, a bright future is expected owing to the growing trend of immigration and expanding globalization.

The real estate investors can start investing in Orlando investment property and other areas currently since outstanding results are expected in the future.

Basics of Accounting Packages

J. Hamilton Fraser — Mon, 28 Jun 2010 15:54:01 +0000

When it comes to choosing accounting packages, the most excellent choice is frequently reliant on the size of the company and the number of employees working for the company. Every enterprise needs to select an accounting program that can serve the requisites of the business and convene with the skills of the personnel who will operate the accounting solution.

Pointers to Remember

Most small businesses do not obtain any benefits from sophisticated accounting application if the technical requirements of such program surpass the skills of the users to generate efficient and accurate financial records and to utilize the full facilities of the software in sustaining a high level of financial control.

On the other hand, simple bookkeeping software may not furnish the level of financial control over accounting matters of large companies. It’s vital to understand that cash flow and financial control are of great importance when the credit is really tight. It is essential for every company to keep a set of accounts and books in fulfilling their legal obligations to compute the net taxable profit needed to be affirmed to the taxation authority.

Web-Based Accounting Software

Web-based accounting software packages make use of a database that has the capacity to make regular financial and tax reports, as well as creditors’ reports and statements, debtors’ reports and statements, cash flow statements, and also a set of monthly accounting reports like balance sheets and profit and loss accounts.

The setback of this accounting solution is that a company may only take advantage of the software’s functions if the employees are adequately trained about technically running the package, modifying the financial data contained, and procuring full financial control over the business.

Software Selection

When picking any accounting system, one should determine initially the final accounting requirements of the business. If thorough financial control, specifically over client accounts or individual suppliers is critical and the business is huge enough to hire office-based employees to include a fulltime bookkeeper or accountant, then a database system may be the most ideal option.

Otherwise, if the business is smaller and needs detailed financial records to support the statements at the end of the year while the financial control is already enough to be handled by the business owner, an accounting application based on spreadsheets would be enough.

Cheapest Motor Insurance can be bargained on

J. Hamilton Fraser — Mon, 28 Jun 2010 12:28:05 +0000

The cheapest motor insurance depends on a number of factors. If there is a consumer who wants to purchase low cost car insurance and researches on it by applying at different companies will find out that the insurance quotes for the same motor vehicle are different at different companies and all of them claim to be providing the Cheapest Motor Insurance plans. This is because of the number of factors affecting motor insurance and the priority they are given by different companies.

It is important that one knows what factors affect motor insurance before looking for and purchasing cheapest car insurance because knowing these factors helps you bargain and get the best deal out of the insurance company. Of course to start, one must look for the best player who will offer the most economical of all motor insurance.

It is after this that the nuances may be explored to reduce the insurance premium. One of the major factors that affect motor insurance is the mileage covered by the car using which the insurance company assesses how much does the vehicle travel in a year. This information is vital for the insurance companies to calculate the risk factor on. It has been ascertained that the higher the mileage, the higher is the insurance premium. The logic is in place behind this judgment. The more a motor vehicle travels, the higher are the chances of breakdown, repairs, damage etc. Hence the probability of the claim being made is higher. This in turn increases the risk at the consumer’s end and hence the insurance premium is also higher. This is one of the major factors that affect the motor insurance.

The second factor that affects the premium quote is the driving history of a driver. If there have been any claims made in the past, then the insurance quotation is higher.

What Remortgage Services Have To Offer

J. Hamilton Fraser — Sun, 27 Jun 2010 22:11:55 +0000

Most people are looking for a way to save money in today’s harsh economy. Remortgage services are being increasingly talked about as one way for home owners to save significant money.

You may have heard about remortgaging through the older terminology. It is frequently called “refinancing, ” which essentially it is, the only difference being that remortgaging is strictly home refinancing. You can do this type of refinancing through your current lender, but you will probably get a much better deal if you change lenders.

All you need to do is go online and present your current mortgage arrangements to your new potential lender. They will probably offer you better terms than you are currently getting. You will probably find that you can get a lower rate of interest and possibly many other favorable terms. They want you to change to their service and will do their utmost to get your business.

Before you do anything else, read up about remortgaging and understand what you’re getting into. Your home mortgage is most likely your biggest monthly expense and it is a long term expense. Don’t sign any agreements until you understand all the details about what you’re signing.

Above all, make sure you know that you are dealing with a reputable financial institution. This is particularly important if you are dealing with a company online. There are far more reputable companies online than there are disreputable, but don’t take your lenders word for it, no matter how good they make themselves sound. Do your homework first!

You may be more interested in getting money for remodelling or extending your home than you are in cutting back on your mortgage repayments. This is easily done and you may be surprised by how little it will cost you per month.

Remortgage services can help homeowners in many ways. You can get a free quote online and plenty of useful information. See what they can do for you.

Settle Tax Debt Today

J. Hamilton Fraser — Fri, 25 Jun 2010 16:42:00 +0000

The IRS (Internal Revenue Service) in the US modified the forms and instructions for their Offer-in-Compromise (OIC) program in July of 2006 to complement the Tax Increase Prevention and Reconciliation Act. The new policy requires applicants of OIC to promptly start making payments on their proposed offer.

Things You Need to Know

Filing an OIC is one of the five strategies to swim out of the sea of debt.

The OIC program is the only method to settle tax debt for an amount less than what you essentially owe. However, this program has been misconstrued by many consumers and at times abused by dishonest and unscrupulous tax preparation services.

On 16^th of July 2006, all OIC applicants are required start making payments on their proposed settlements. They can choose from the three payment choices; lump sum payment, monthly payments throughout the remaining statute of limitations, or payments on a monthly basis over 24 months (2 years) or less. Under this new law, all applicants are also necessitated to provide 20% down payment if they prefer lump sum payment plan, or should start making payments monthly if they go for one of the two monthly payment alternatives.

In addition, the Internal Revenue Service started to go after obnoxious tax preparers who send offers that do not convene with the IRS eligibility qualifications and requirements.

IRS Forms

The IRS made it almost effortless to prepare and submit an offer by stipulating instructions that are easier to read, understand, and follow.

To settle IRS debt conveniently, you can procure all the forms for Offer in Compromise settlement as well as the instructions in a booklet through the IRS website, known as Form 656-B in PDF format, composed of 46 pages. If it is more expedient on your part, you can contact the Internal Revenue Service at 1-800-829-3676 and request them to mail you the booklet, or you can drop by in your local IRS taxpayer assistance center to pick it up.

Note that the IRS charges $150 as user fee to process your OIC. You need to recompense this fee whether you work with a tax professional or you arrange the offer yourself.

The Many Advantages of Investment Property

J. Hamilton Fraser — Wed, 23 Jun 2010 16:58:57 +0000

The number of people interested in investment property is going to see a huge surge due to the London Olympics in 2012. Not only in London, but other parts of UK too are going to see similar surge in interest in buying investment property. There are many advantages of investing in property, whether you are someone buying a house for the first time, or you are a real estate person who likes to make quick money by buying and selling property. Whatever the scenario, if you are smart enough to spot the right time and property investment it is always profitable.

The most important benefit of investment property is the stability it provides to your portfolio. The stock market can help you make quick gains but your gains might just get eroded as fast. In short there is more volatility in places where you can make money very quickly and lose fast as well. However, if you buy a house or a building and rent it to tenants you are assured a steady stream of passive income. More importantly, the land is always yours and it is highly unlikely that the value of land will ever go down.

The most important criteria for investment property is to think of it as a long term plan. Then you will increase your chances of making money. There will be the odd ups and downs in the real estate market, but if you know the right mortgage lenders to fund you and do your due diligence about a property, you can never really walk away with a loss. However, there are certain things that are very important which you need to look at before investing in a property.

Location for a start, the demand for houses from a rental perspective, any incurring maintenance charges and the overall placement of the area and the building itself are all factors that you have to carefully assess and analyze before deciding to buy investment property. Financial gain is almost a certainty if you can show patience and wait for the opportune moment to sell off your property.

According to statistics, the price of the average house doubles every 7 years. Depending on the demand for that area, new developments and socio economic conditions could cause this rate to go up or down. But if you own investment property and are not in a hurry to sell it off, you are likely to make a profit eventually.

Where to Trade if Your Stock is Delisted

J. Hamilton Fraser — Tue, 22 Jun 2010 21:29:56 +0000

The average investor will buy stocks that are listed on national stock exchanges. The trades are initially made through a broker, whether online or traditional, yet ultimately the trade is sent through an exchange. What many investors had failed to consider, until the recent market downturn, is that a stock can be delisted just as easily as it can be listed if it fails to meet the minimum requirements of the exchange.

A stock might be delisted for a number of reasons, including falling below the established threshold of number of outstanding shares, trading below a minimum share price, or the market value of all outstanding shares falling below a certain total value. Each exchange has different rules for listing and delisting stocks, and each usually have a grace period, such as 30 business days, before they delist a stock.

But what happens if a stock is delisted that you currently own? Can it be traded?

The answer is yes, it can be traded. Delisted stocks can be traded on either the Over the Counter Bulletin Board (OTCBB), or more often the Pink Sheets. Both carry significant risk and very little regulation. Trades through either of these services can usually be handled through your broker, even an online broker. Investors may purchase these shares because they expect the company to avoid bankruptcy and eventually recover its value. Some investors only trade shares of delisted stocks in hopes of profiting from an extremely under-valued company.

One thing to keep in mind if you hold a newly delisted stock is that institutional investors and funds often have restrictions on trading in stocks that do not trade on one of the major exchanges, such as the New York Stock Exchange (NYSE) or NASDAQ. Thus, those investors and institutions may begin to liquidate their positions, thereby devaluing the stock even further. Unless you are extremely confident in the companies ability to recover, you might consider cutting your loses and dumping the stock as soon as possible.

The Ultimate IRA Rules

J. Hamilton Fraser — Tue, 22 Jun 2010 20:00:06 +0000

IRA stands for Individual Retirement Account, which allows you to save for your retirement by contributing for as long as you make taxable earnings. Taxable earnings include fees, bonuses, wages, salaries, taxable alimony, tip, separate maintenance payments, and commission on sales.

There are established IRA rules concerning how much money you can place to your IRA, in what events or conditions can the money be distributed from your account, and the funds that are required to be distributed after a particular period of time.

When you place money in a traditional IRA, you may have contributions that are tax-deductible under specific circumstances. The tax deductibility on your contributions relies on your income, tax filing status, and eligibility to participate and contribute to employer-sponsored retirement accounts.

Eligibility Requirements

For you to deduct the maximum contribution amount, you should become aware of the income limitations and IRA contribution rules of individuals and couples that wish to become active participant in this retirement plan.

If you are single or head of household, you are eligible to receive the full IRA deduction if your AGI or adjusted gross income is not more than $55,000. If your income is between $55,000 and $65,000, you will be permitted to get a partial deduction. On the other hand, if you earn more than $65,000, you will not be authorized to deduct any contributions to your traditional IRA.

If you have the status of “married filing jointly”, you contribute actively to your account, and your AGI limit is set at $89,000, you can have partial deduction if you and your spouse’s combined earning is between $89,000 and $109,000. You will get no deduction if your earning is more than $109,000. If your spouse’s income limit is set at $162,000 or lower and you are not an active IRA participant, then your spouse will benefit from full deduction, while he or she will be granted with partial deductions if his or her earning is between $162,000 and $172,000. No deduction is awarded if your combined yearly income is more than $172,000.

The Internal Revenue Service indicates the maximum IRA limit on deductible contribution. For 2010, you can house as much as $5,000 if you are less than 50 years old, and $6,000 if you are 50 years old and older.