Wednesday, November 30, 2011

Is Rewards Checking Right for You

Rewards checking accounts could be found at nearly any bank but not anymore. Only a few banks offer rewards checking accounts. Some banks have restricted their rewards checking accounts to new customers who are state residents. Banks make money with rewards checking accounts when customers spend a lot of money using their debit cards. Rewards checking accounts benefit savers. Spenders with low balances don’t reap the benefit. The pros of having a rewards checking account are:

1. FDIC or NCUA insured.
2. Can make purchases.
3. Can get an account with no fees or minimums.
4. Easier to obtain than a credit card.
5. Avoid finance, interest charges and late fees.
6. Multiple ways to earn points.
7. When making online purchases use your check card as a credit card to qualify for points.
8. Can use as a credit card instead of debit card for increased security protection.
9. Requirements: setup direct deposit, use online statements and/or banking, use a minimum number of times per month, login to your account at least once a month, may only earn interest on a portion of your deposit, transactions must post to your account no later than the qualification period.
10. Returning goods or canceling services treated the same as cash.
11. You don't have to carry cash, a checkbook or traveler's checks with you.

The cons of using a rewards checking account are:
1. You have to qualify.
2. Some merchants don’t require a signature for purchases under $50 or $25.
3. Using as a debit card for online purchases, paying bills or making a charitable donation may cause you to be ineligible for rewards.
4. ATM transactions may not earn rewards.
5. May require signature based transactions.
6. Interest rates may vary depending on the economy.
7. Some banks may charge a fee for using a check card as a debit card.
8. Some banks process debit charges although insufficient funds are in the account.
9. May not be accepted by some merchants unless it has a Visa or MasterCard logo.
10. May place a hold on your debit card for more than the cost of the purchase.
11. Provides less protection for purchases but you may dispute unauthorized charges or other mistakes within 60 days.

Comparison shop to find the best account for you using sites like

Sunday, November 27, 2011

Promising Help for Airline Travelers

The cost to fly increases every year. What airlines fail to realize is that with every price increase, the number of passengers decreases. Everyone recognizes the high cost of gas but what is the justification for charging $100 for an oversized bag, $9 for a bag of peanuts or charging up to $150 for a child traveling alone. It would help me and possibly other travelers if the airlines explained why they charge the additional fees and how they determine the various prices.

Airlines began charging for baggage when rising fuel prices started to rise in 2005 and reached an all-time high in 2008 when the recession occurred. Airlines complained that they were not making enough money which is why they had to start charging customers additional fees. I wonder if their executives took a reduced salary to help minimize the profit loss. Not!

Some airlines allow you to travel with your first bag for free but few and far in between. Here is a breakdown of the top airline baggage fees: AirTran 1st bag $20, Southwest 1st bag free, American 1st bag $25, Delta 1st bag $25, JetBlue 1st bag free, United 1st bag $25 and US Airways 1st bag $25. Airlines charge for meals, oversized bags, baggage, traveling with a pet and an unaccompanied minor fee just to name a few. Traveling fees can range from $3- $584 in addition to airfare.

Senator Mary Landrieu has introduced a bill that would allow all passengers no matter what seating to check one bag for free. Senator Landrieu stated, “Many airlines consider checking a bag not to be a right, but a privilege — and one with a hefty fee attached,” and stated her legislation would “guarantee passengers one checked bag without the financial burden of paying a fee, or the headache of trying to fit everything into a carry-on.”

The bill would allow airline passengers to check one bag for free and prohibit fees for regular sized carry-on baggage. The bill would require that airlines tell passengers about restrictions on weight, size and number of bags prior to arriving at the airport. It would also mandate that airlines make public their fees for all types of baggage and for preferred seating.

As travel fees continue to increase, passengers will continue to find ways to carry on as much baggage as possible to save money. Eventually the fees charged by the airlines will backfire on them and they will be forced to lower their prices or go out of business. During the Thanksgiving holiday more passengers rode Amtrak and Greyhound or drove instead of flying. Here are 10 tips for saving money when flying:

1. Dates. Fly before a holiday and return after a holiday. Consider flying on a Tuesday or Wednesday during non-holiday periods. Traveling during Christmas and New Year’s is more expensive than traveling during Thanksgiving.
2. Read. Sign up for frequent flyer programs and credit card or checking rewards program that offer airline points. Read the terms and look for partners that offer miles.
3. Delay. Consider purchasing a flight with a layover to earn more miles and get a cheaper fare.
4. Earn Miles. If you don’t fly enough to use your miles some programs allow you to cash in your miles for subscriptions, gift cards or donations.
5. Trade. Ask about trading your frequent flyer miles for another airline’s frequent flyer miles using sites like
6. Buy. You can buy frequent flyer miles to boost your account balance.
7. Borrow. If you know a friend or family member that is not using their frequent flyer miles they can share their frequent flyer miles with you through the airline or through
8. Sell. You can sell your frequent flyer miles at sites like
9. Weekend. Consider staying over on a Saturday night. This will save you money on airfare on hotel costs.
10. Early. Book your flight months in advance and sign up for flight alerts. Comparison shop to find the best deal.

Thursday, November 24, 2011

Don't Be a Victim This Holiday Season

The media and police are warning consumers to use caution and common sense when shopping during this holiday season. The holiday seasons are one of the highest crime periods of the year.

The unemployment rate is at 9.0%. Other Americans are only working part-time or minimum wage this holiday season people and thieves are more desperate than ever. Just today I went to the grocery store. A man bought a newspaper and then robbed the store.

Thieves are stealing gas, groceries out of the trunk of cars, performing snatch and grab where a purse is stolen out of a locked car, stealing grocery carts full of groceries when the customer walks to get their car; checking for unlocked car doors, apartment and homes doors or windows, stealing packages from UPS or FedEx and more.

Don’t be a victim this holiday season. It is better to be safe than sorry. Don’t think you are immune. Always be aware of your surroundings. Here are 26 tips to reduce your chances of being a victim this holiday season.

1. Lock all the doors and windows at your home when you are at home and away from home.
2. Get in your car quickly, don't linger. Lock your doors as soon as you get in the car.
3. If you are a single woman and hire a professional to fix something in your home, call a friend or relative to let them know you are getting work done in your home. Don’t answer questions that indicate you live alone. Put away any valuables and personally identifying information.
4. Don't discuss your salary, where you live or where you go shopping. You make spark the interest of a potential criminal or actual criminal.
5. Do not leave your child or pet alone in a locked car.
6. Don't leave anything in your car. Thieves are breaking into cars and stealing whatever they find, CD's, clothes, etc.
7. Don't use the ATM in a secluded, poorly lit area or at night.
8. Buy gas during the daytime.
9. Be on guard when riding in taxis, many drivers get robbed during the holidays.
10. If you feel someone is following you try to walk towards a lighted area or near other people. If that's not possible call a friend or family member from your cell phone. If you are attacked they can call the police and locate you.
11. Don't park near a van or truck this obstructs your vision especially at night.
12. Leave the mall before gets dark. Get a mall security guard to walk you to your car.
13. Don't go shopping when it’s dark but if you have to, go shopping with a friend or two.
14. Tear up boxes that contained expensive gifts and put them in a separate trash bag to deter thieves that may go through your trash.
15. When walking, shopping or driving use your Bluetooth. Talking without a Bluetooth is very distracting and thieves wait for the perfect opportunity to rob you while you are distracted.
16. If you are getting a package delivered have it delivered to a neighbor’s house.
17. If you order checks have them delivered to your bank.
18. If you go out of town use a timer on your lights. You can also have a friend or relative house sit while you are out of town.
19. If you go out of town, hold your mail at your local post office.
20. Don't carry your social security card or birth certificate card in your wallet.
21. Don't carry your checkbook unless you know you will write a check that day.
22. Only carry cash and possibly one credit card or your debit card.
23. If you come home when it's dark outside talk on your cell phone until you get in the house and lock the door.
24. If you are getting groceries out of your car close the car. When walking in your house lock your screen door behind you. Someone could walk in behind you without you knowing.
25. Avoid taking your trash out at night.
26. Don't fall for helping someone scams where someone asks you to walk away from your car to help someone.

Be safe this holiday!

Monday, November 21, 2011

Reduce Spending for Holiday Meals

During the holidays it is so easy to spend money with all the advertisers, family and friends asking you to buy this or buy that. Resist the temptation to spend money that you don’t have, buy more than you need, or buy something you probably will not use simply because it is on sale. Many times items that are on sale are not really a bargain. Do comparison shopping to see if you can find the item for a cheaper price at another store or online. Here are 9 ways to save money shopping for meals this holiday season:

1. Plan ahead. Don't wait until the day before the holiday to go shopping. Lines at the register are longer and the selection of items is limited. Try shopping at least a week in advance or early in the morning.
2. Menu. Create a menu ahead of time and stick to it. Consider low cost items for the menu such as potato salad, salads, sweet potatoes, casseroles, etc.
3. Budget. Create a food budget and don’t go over your budget.
4. Local shopping. Visit local vendors to purchase meats, fruits and vegetables which will be much cheaper than the grocery store.
5. Ask for help. If you are having breakfast, brunch or dinner at your house ask friends and family to bring a dish to help cut downs on costs.
6. Coupons. Use coupons. Shop at stores that offer double coupons.
7. Shopping List. Use a shopping list and stick to it.
8. Return. If you realize you bought too much of one item return it to the store for a refund.
9. Leftovers. Freeze leftovers or take to work for lunch.

Friday, November 18, 2011

Watch Out for Layaway Tricks and Gimmicks

Layaway programs became popular during the Great Depression. Layaway was used as a form of payment prior to credit cards. Layaway allowed consumers to purchase an item and pay for the item in installments. Once the item was paid in full, the consumer received the item.

As credit became available layaway programs became more popular with those who did not have access to credit – low-income shoppers. Layaway programs were phased out in the 1990s and most were completely eliminated.

Senator Charles Schumer is pushing that retailers inform consumers that layaway plans can actually cost a consumer more than using a credit card. Senator Schumer states that the cost of a layaway with a $5 fee can equal 40% interest over 2 months. Senator Schumer says if retailers don’t comply he will ask the Federal Trade Commission to determine if the practice is deceptive and misleading.

Senator Schumer said, “The holiday season is supposed to be about giving and not taking, but these layaway programs are taking advantage of people and charging them outrageous interest rates, under the guise of making it easier and more affordable to shop.”

Layaway is not a reason to spend more money than you should. Layaway requires you to be responsible shopper. Don’t go overboard this holiday season because of layaway. If you don’t have the money to buy something that means you can’t afford to buy it and don’t need it. You have to ask yourself why are stores bringing back layaway. Is it to help consumers? Wrong! Layaway was brought back so stores can make more money.

Some shoppers may feel the pressure of the holidays and may see layaway as a good option due to commercials and ease of the programs but don’t consider the hidden costs. Wal-Mart terminated its Christmas layaway program in 2006 but is bringing it back this holiday season. Some stores offer layaway for free year round in addition to the holiday shopping season. Some stores that offer layaway are: Wal-Mart, Sears, Best Buy, Kmart, TJMaxx, Burlington Coat Factory and Toys R Us. Here are 8 advantages of using layaway:

1. No interest.
2. Pay for items in installments over a period of time.
3. May be able to purchase items on sale.
4. No set payment schedule.
5. Purchase received when paid in full.
6. Easier and more convenient.
7. The fees and terms never change.
8. Doesn’t require a credit card or debit card.

Here are 13 disadvantages of using layaway:
1. Enrollment fee or service fee can range from $5 to 5% of the total purchase price.
2. Downpayments can range from 5 to 10% the total cost of the items.
3. Requires minimum purchase.
4. May have to pay the full cost of items instead of the sale price.
5. If an item goes on sale, you may not eligible to get the items at the new sales price.
6. If you miss a payment, your purchase may be canceled and you may lose any money paid or may be able to get store credit or a gift card.
7. Payments only accepted in person at the store.
8. Only available on certain items.
9. You have a certain amount of time to pay for the purchase usually 2 to 3 months.
10. Spend more in gas costs and mileage going to the store to make payments.
11. You may miss out on other sales such as Black Friday.
12. If the store goes out of business or files bankruptcy you lose your purchase and your money.
13. Online sites may require additional fees.

If you're unable to complete the payments by the due date, you have to pay a cancellation fee and/or restocking fee of $10 to $15. You may get back any money you paid on the items or lose all of your money depending on the store.

You don’t pay an interest rate using layaway but you do pay interest. You pay more for the purchase than if you just paid with cash. For example, if you put $300 worth of items in layaway, you will have to pay a service fee of $15 (5%) and another $30 (10%) for the down payment. The down payment is applied to your balance but the service fee is not. You will end up paying a total of $345 ($15 + $30) for your purchase or an additional 15% of the original cost of the item.

If you have to cancel your purchase you will pay $10-$15 so you will lose $25 - $30 (8.33 – 10%) of the cost of the item. Make sure you shop with a reputable name brand company.

Tuesday, November 15, 2011

The Dangers of Mobile Banking

Over 230 million Americans use smartphones everyday but many are unaware of the dangers of using mobile banking. Smartphones have the potential to pose a real security threat. All smartphones should include good security software to allow users to block malware and locate a phone if lost. Users who access personal information or download applications are at greater risk.

Mobile banking also known as M-banking, mbanking or SMS banking allow customers to check balances, and perform account transactions using their smartphones. Some experts feel that Wells Fargo and Bank of America’s mobile banking services provide strong security and offer multiple downloadable applications. Mobile banking services vary based on the type of phone you are using, the cell phone plan and technology the bank is using.

There are several advantages to using mobile banking such as: easy access, many applications for smartphones, easy control of your money, availability 24/7 anywhere, anytime and no fees. Disadvantages to mobile banking is that mobile banking provides fewer services that internet banking and increases security risks.

Many big cities such as New York and Washington DC using mobile payments to allow drivers to pay for parking meters. Drivers register online and can pay for the parking and select the time they wish to purchase using an application or text message with the meter number.

Unfortunately mobile payments increases the chances of a driver getting a ticket as soon as the meter expires versus with traditional parking meters drivers may get lucky and get a few extra minutes on an expired parking meter.

BlackBerry software and core applications are digitally signed to ensure integrity preventing the smartphone functionality from being directly accessed by other applications. However, this does not mean that blackberry is immune to viruses or security risks.

iPhones do not provide security software because the iPhone does not share applications; the risk of spreading a virus from phone to phone is very low. If an iPhone has been altered or changed in any way this increases the chance of a security risk. This can cause the iPhone to download and run unauthorized software which can slow your system down and may lead to identity theft. However, this does not mean that iPhones are immune to viruses or security risks.

The Android software has less virus attacks because most of the viruses are written to attack Windows based programs. However Android is not immune to viruses. Here are the top 9 virus protection software for smartphones:

1. ESET Mobile Antivirus is only available for the Windows Mobile platform.
2. BullGuard Mobile Antivirus is available for pocket PCs and smartphones.
3. F-Secure Mobile Security Business is available on Windows Mobile and Symbian platforms.
4. Kapersky Mobile Security provides the same level of protection you would get on a computer.
5. McAfee Mobile Security for Enterprise antivirus anti-spyware software operates on any Windows Mobile based device.
6. Trend Micro Mobile Security is a package of Windows Mobile and Symbian antivirus software.
7. Norton Smartphone Security provides the same level of protection you would get on a computer. Norton Mobile Security Lite offers virus protection for smartphones and blackberries.
8. McAfee offer virus protection for smartphones and blackberries.
9. AVG offers virus protection for Androids.

Saturday, November 12, 2011

Why You Should Give to Charities

Do you donate to charity? Do you know why you donate to a specific charity? Do you make anonymous contributions or like to receive recognition? Whom do you give to, and why? Do you donate to small charities or larger ones? Do you donate only to tax deductible charities?

Google executive Sheryl Sandburg states that less than 1/3 of the money that individuals gave to nonprofits in 2005 reached the poor. A study by the Center on Philanthropy at Indiana University showed that only 8% of charitable donations provide basic necessities, food and shelter. Sandberg names two possible explanations for this “charity gap”: (1) It is easier to give to those in our own communities than to the truly economically disadvantaged who are outside our immediate circles of relationships; and (2) donors do not fully understand where their contributions are going.

Sandburg encourages Americans to consider the disconnect between their desires to do help the poor and the destination of their money. Americans donate the most to religious groups, education, foundations, health care organizations, human services and arts and humanity groups.

The US average for donating to charities is 2% or $76. The wealthy spend 3% of their monthly spending towards charity. Most charitable states are: Delaware, Washington, DC , Kansas, Oklahoma is the top state, and Washington. The United States is in the lower half of the top 20 of all countries that donate to charities. Approximately 86% of professional athletes donate to charities.

People give based on their identity: who they are and how they view themselves. The degree to which identities are flexible, involve a willingness to act, and help make sense of the world has significant implications determining whether and how much people give.

Individuals who donate to charity may deduct contributions on their federal tax returns. Contributions must be made to legitimate charity to receive a deduction; contributions to a specific person may not be deducted. Keep careful records of money given through bank records or written communication from the charity, which includes the name of the organization, the date a contribution was given, and the amount.

For a deduction of $250 or more, individuals need written confirmation from the charity proving that the donation was contributed and if the charity provided any goods or services in exchange for the donation. Donating to charities provides a way for you to help others. You can donate to charities in several ways: through money, non-cash donations or time. Now more than ever charities need your help. There are so many people suffering in the United States and across the world but they need your help. Here are 6 questions to consider when donating to charities:

1. Is the charity recognized as a non-profit by the IRS? It’s necessary in order to write the donation off.
2. What percentage of my donation will go to the charities? Should be 75%+
3. How long have they been in operation? 5+ years, a proven track record is key
4. Have you been reducing services? If yes, that could be a red flag.
5. Do you have a year’s worth of operating capital? If yes, then it shows staying power.
6. Remember to get and store your receipt!

Here are 4 tips on donating to charities:
1. Charitable Organization. The organization must be recognized by the Internal Revenue Service as a 501(c)(3) tax-exempt nonprofit organization. Verify status by checking and
2. Keep receipts. If you donate a cash gift greater than $250, the charity must acknowledge the gift in writing. If less, you’ll need a receipt, canceled check, or credit card statement. If you do payroll deduction, you need the pay stub or W-2 and they’ll provide acknowledgement saying this deduction was a charitable contribution. For non-cash gifts, request a receipt with the name and location of the nonprofit, date of the donation, and description of the item.
3. Give appreciated assets. Appreciated assets include stocks and real estate. By donating an appreciated asset, you can get the tax deduction based on the current value, not the lower value of the property when it was obtained.
4. Volunteer work deduction. Out-of-pocket expenses related to the volunteer work, can be deducted.

Wednesday, November 09, 2011

How A Tragedy Can Turn Into A Nightmare

The death of Rapper Heavy D reminded us that tomorrow is not promised. It also provides valuable lessons that if your finances are not in order a sudden tragedy can turn into a nightmare. Sudden tragedies are personal life events that occur and can affect your financial security and well-being. Additional sources of income can change without warning.

Many families are caught off guard when a family member dies unexpectedly and struggle trying to mourn for their loved one and handle financial payments and funeral arrangements. Keeping your finances in order and providing important information to your family relieves a burden on them when a death occurs and makes the healing and mourning process easier.

If your parents, spouse or children refuse to talk about your death, get a neutral party such as an insurance provider to talk to them. To help prevent a sudden tragedy from turning into a financial nightmare follow these 18 tips.

1. Will. Create a will and update it at least one a year or if you experience a serious health change or life event change.
2. Lawyer. Establish a power of attorney which allows a person provides a written authorization to act on another person's behalf.
3. Health care proxy. Advance directives or health care proxies identify a person's wishes and preferences for medical treatments. When a patient is incapable of making medical decisions, a health-care proxy can act on the patient's behalf to make decisions consistent with the patient's will.
4. Trust. A trust manages the distribution of a person's assets by transferring it to other people. Trusts can be used to shield assets from estate taxes.
5. Advance Arrangements. If you are dying you can make advance arrangements or prepay for your funeral. Let your family know your wishes. Consider bundling services or prepaying for items if you know your wishes will not change or you don’t plan on moving to another state. This also spreads out the costs over a period of time which reduces the financial burden. The risk of prepaying for services is that the company may go out of business before the time of death.
6. Instructions. Leave instructions with your spouse, child or close friend and the executor of your estate such as: location of important papers, account numbers, list of assets and debt with balance, monthly payment and due date; contact information for your lawyer, financial advisor, doctor, your wishes for funeral arrangements, etc.
7. Beneficiary. Ensure beneficiary information is reviewed yearly on all insurance and financial documents, accounts, benefits, will or when a life change occur such as marriage, divorce, birth of a child, etc. Provide your beneficiaries with information to access your accounts including usernames and passwords, and contact information for your service providers.
8. Store. Keep a copy of all financial and important documents in one location: social security card, insurance policies, birth certificate, deeds, marriage certificate, passport, driver’s license, stock certificates, retirement and bank statements, tax returns, car title, etc. Make at least 5 copies of each document and store in different locations. Buy a waterproof and fireproof safe and store a copy of all important documents in the safe.
9. Be aware. If your spouse handles all of the finances become knowledgeable about the finances too.
10. Update. Update the deceased person’s assets or joint accounts to the survivor’s name.
11. Debt. Don’t pay any debt of a deceased person until you verify with a lawyer.
12. Taxes. Hire a tax preparer or accountant to prepare your taxes. The tax preparer will be knowledgeable about laws that affect beneficiaries and estates.
13. Comparison Shop. Get estimates of various services needed so you make create a budget for those expenses if you don’t have the money upfront. The average cost of a funeral can range from $2,000 to $10,000. Ensure your insurance policy at a minimum covers the funeral arrangements.
14. Burial Fund. You can create a burial fund to cover the cost of funeral arrangements which will be an extra source of funds that can cover unexpected costs. The fund should also have enough money to cover monthly expenses for 3-6 months. The ideal option is for 9-12 months.
15. Supplemental insurance. Consider purchasing supplemental insurance is Medicare does not cover all of your services or if you are not eligible for Medicare.
16. Long-term insurance. Consider purchasing long-term care and disability insurance as early as possible to save money on the cost and reduce the cost of future medical expenses.
17. Medical. Obtain copies of your medical records each year.
18. Primary Contact. Designate a family member as your primary contact to keep in touch with family, friends, employer, and service providers.

Sunday, November 06, 2011

Balance Transfers Impact Credit Scores

Repost from

Need money for a small home remodeling job, or to make much needed car repairs? Or do you simply want to use a zero percent balance transfer offer to pay down high-interest credit card debt?

Th_balance-transferBefore you apply for that new balance transfer card, make sure you know the ins and outs of how balance transfers impact FICO scores so you can minimize potential disadvantages.

Taking out a balance transfer may lower your FICO score in the short-term. But it can also help boost your score over time. Here are the three ways in which taking out a balance transfer will impact your credit score.

1. Opening a new account will shorten the average length of your credit history. Any time you open a new credit card, it will shorten the average length of your overall credit history.

“About 15 percent of your FICO score takes into account the length of your credit history,” says Kim McGrigg, Community and Media Relations Manager at Money Management International. “Part of that average is all your accounts, so when you open a new account, obviously it affects the average length of credit history. If you close the old credit account, it will impact scores even more.”

The good news is that the impact on credit scores from opening a new account is small and relatively short-lived, as long as you follow good credit management practices on the new account. The key is to keep that old account open and use the card occasionally so it’s still active.

2. Credit inquiries will ding your FICO score.
Each time you apply for credit, a lender will check your credit history to determine if you’re a good credit risk. This will show up on your credit report as a “hard inquiry,” which can lower your score.

According to FICO, one credit inquiry every once in a while will have minimal impact, shaving as little as four to eight points off credit scores, and the effect, again, is relatively short-lived. However, frequent credit inquiries affect FICO scores proportionately more and the impact lasts longer.

3. Your credit utilization rate will suffer or improve, depending on how you use your balance transfer. Next to paying bills on time, your credit utilization rate, or debt-to-credit ratio, is one of the most important components of your FICO score. It makes up a full 30 percent of scores.

And when you take advantage of a balance transfer offer, it can hurt or help your credit utilization rate, depending on how you use the loan.

For example, if you open a zero percent APR balance transfer credit card in order to fund a small home remodeling project or large purchase that you plan to pay off gradually, your debt-to-credit utilization will increase, lowering your score. The impact may be blunted by the fact that your overall credit limit will also increase. However, if the loan is large enough, your score will still be negatively impacted until you pay down the loan.

On the other hand, if you take out a balance transfer to pay off existing high-interest debt on another credit card, your overall utilization will decrease. The amount of debt that you have will stay the same, but with the new credit card, you will have a greater overall credit limit, so the total debt-to-credit utilization will improve.

In addition, your within-card utilization may also improve, which help boost your score. For example, let’s say you apply for a new balance transfer credit card and get a card with a $10,000 limit. If you transfer $5,400 from a card with a $6,000 credit limit to a card with a $10,000 limit, you will lower your overall credit utilization — and you will lower the within-card utilization as well (from 90 percent utilization to 50 percent).

Your credit score may be temporarily dinged by opening a new account. However, because credit utilization accounts for a full 30 percent of your score and opening new accounts only affects 10 percent of your score, the overall impact will still be positive.

However, with that said, be aware that having extra credit available could also turn out to be a credit score liability if you’re not careful, warns McGrigg, especially if you keep your old account open and active.

“It’s true that if you don’t close the old account, you might actually have a chance to improve scores,” says McGrigg. “However, that’s only true if you don’t charge the account right up again. For many people, having an account with a zero balance is too tempting, and they might end up twice as much in debt as before.”

It’s also important that you don’t get complacent, warn experts. Transferring your debt to a lower interest balance transfer card may be a step in the right direction — but there’s still more work to be done.

“So many people think that [by] moving to a better account with a better interest rate, their problems are solved,” warns credit repair expert and financial literacy advocate Harrine Freeman, “But they’re really just moving money. Don’t get fooled by tricks and gimmicks. You don’t know what will happen in another year; you could move, you could lose your job. It’s best to just pay your debt the old-fashioned way.”


Thursday, November 03, 2011

$10 Million Gone Wrong

The Kim Kardashian wedding is an example of how one can waste money. It is estimated that her wedding cost $10 million. This is an example of $10 million gone wrong! It is reported that Kim Kardashian and her husband Kris Humphries received wedding gifts and some products and services free of charge. Other vendors provided discounted products and services.

It is reported that Kim Kardashian and her hubby earned over $18 million for their wedding: $100,000 from vacation photos in Mexico, $15 from E! for the wedding special, $2.5 million for wedding photos according to In Touch Weekly senior editor Dorothy Cascerceri. Kim Kardashian was also paid $1.5 million dollar deal for exclusive rights to wedding photos $50,000 for her bachelorette party at Club Tao in Las Vegas.

Kim Kardashian and Kim Humphries spent: $2 million for her engagement ring, $750,000 for snacks, $150,000 for hair and makeup, $200,000 for her wedding band and $2 million for flower arrangements.

Kim Kardashian borrowed jewelry worth $10 million – earrings valued at $5 million and a headpiece valued at $2.5 million. Kim received 3 free Vera Wang gowns valued at $60,000, Lehr and Black wedding invitations for free valued at $10,000 and a cake from Hansen’s Cake for free valued at $6,000.

Many believe the wedding was a publicity stunt. Time will only tell the real story. This wedding has caused several different reactions and anger among some due to the price tag.

If the companies that worked on Kim Kardashians wedding hired unemployed workers for at least 50% of the staff, what a difference it could have made in hundreds of lives. The average cost of a wedding $27,900. The average cost of three months of marriage counseling is $1,200. Had they gone to marriage counseling, they could have saved $10 million.

Events like this are a disappointment to the 14 million people unemployed, 8.8 million part-time employees; 3.5 million homeless Americans, 35.9 million Americans living in poverty and over 45 million Americans do not have health insurance.

This wedding is a good example of how not to spend money even if you can afford it. No matter what type of event you have you should always find a cheaper price. The truly wealthy spend money that they won’t miss. The rich spend money but have to continue to work to earn more money. Since most Americans are neither, it is best to spend less than you earn, comparison shop to find the cheapest price to stretch your money and only buy things that will have a lasting value instead of things that depreciate quickly and have no value like expensive weddings.

Here are 9 ways to save money on a wedding:
1. Date. Schedule the wedding during off-peak times such as October, November or January through March. Choose a weekend such as Friday or Sunday night. Saturdays are the most expensive.
2. Venue. Choose a non-traditional venue such as an outdoor garden, restaurant, home, or event hall.
3. Dress. Purchase the dress during sales, at consignment shops, designer or sample sales, eBay, or a consider a used gown.
4. Reception. Consider having a reception during the day. Brunch or lunch is cheaper than dinner. Select inexpensive options such as chicken or pasta. Don’t provide more than 2 options for guests to help keep costs low.
5. Drinks. Offer a cash bar or limited bar to keep costs low.
6. Cake. Choose a smaller cake just enough for invited guests; keep the design simple to save money.
7. Flowers. Spend money on your bouquet but choose seasonal or local flowers and keep arrangements simple.
8. Photographer. Get referrals from friends or family or look for inexpensive packages. Spend money on the most important pictures and consider hiring an intern and student for additional pictures.
9. Invitations. You can create your own invitations and get them printed at FedEx Kinkos or hire someone with calligraphy skills or an art or graphic design student.

You can have a nice wedding for less than $20,000. If you are in debt, have bad credit or the balance in your savings account is less than the cost of your wedding, consider changing your spending habits and your values regarding money. You don’t won’t to end up like Kim Kardashian spending lots of money with nothing to show for it.