There was a time when people roamed with a lot of cash in their pocket. This was because if you went shopping, the only choice was to pay by cash. But carrying cash always carried a safety threat as well. People could be robbed in the middle of the street and all that cash being accumulated by you is lost in a matter of seconds. Then came credit cards. For public that found it cumbersome to carry cash in the pocket, these cards were a boon. After all, this little innovation empowered them to buy all that they liked without bothering about the amount of cash in their wallet.
Today, credit cards are a common story. People have even equated the ownership of credit cards to be like a status symbol. However, none of this is true. We do agree that credit cards add convenience to your routine. But, at the same time, we would also recommend you to practice certain safety measures when you are using credit cards:
Always sign on the magnetic line. Most people forget to swipe their plastic card when they receive it. This results in the situation where they have been using the card for close to a decade without their signatures. Believe it or not, committing frauds using such unsigned cards is easy.
Swipe carefully: When you eat at a restaurant, don't give the credit to your waiter for swiping it. Instead, ask for the machine to be brought on the table and swiped in front of you. With the new age portable machines, this is completely doable and minimizes the risk of being duped by the hotel staff. This rule is applicable in all transactions that you do with your credit cards.
Don't reveal data to unknown people. If people call you and ask you for your plastic card number under the garb of making you participate in some other activity, please don't reveal the details to them. Instead alert the legal authorities and let them handle the matter if you get such requests repeatedly.
The CVV number is secret. The CVV number is unique to your card and if it is revealed to a greater number of audience, the risk of being duped by the people also increases. Even when you are using the credit card for online shopping ensure that the transaction is facilitated by a secure and reliable payment gateway easily.
Wednesday, January 14, 2015
Tuesday, January 6, 2015
Bad Credit Auto Financing Tips
Bad credit sometimes stands in the way of getting a car loan, but it doesn't have to. Information is king and whomever is the most informed usually walks away the winner, although in this case driving away is the goal.
Let's face it; its 2014 and the Internet provides the ability to access information from anywhere in the world has changed the way we all do business. This kind of access to information can be to your benefit or your demise! Your credit score is one of the most important forms of information that potential creditors want to access to qualify and rank you as a potential customer. These creditors are not the enemy. In fact they are our friends (at least we should pretend they are). They literally hold the keys to your new auto loan. Bad credit aside, the credit report tells the auto lender how much risk is involved with lending you their money.
Playing The Game
I am going to side bar for a second and talk about "Why you don't NEED the bad credit auto lenders money!" Well actually you do need their money to successfully finance your auto loan but there is a key difference I would like to point out. Simply do not "Act" as if you absolutely need their money, that is you have to play the game just as they do. Desperation is your worse enemy if you have bad credit and are in dire need of a new car. Lenders don't make money from lending you money and having you only pay back what you borrowed. They make money from interest on your car loan, and those interest rates can get pretty outrageous. Upwards of 20% depending on the lender, but can average around 15% for those with low credit scores. My point is that you must not give in to the first loan offer, you must NEGOTIATE! Lenders understand that you have probably been turned down multiple times (in fact they can absolutely tell from simply looking at your credit report) and now that you have been approved you will simply roll over at any loan terms they offer. Do not be afraid to let them know that you are interested but the interest rate is too high, or the total monthly payments are a bit much for you to sign for the loan that day. This tip is more mental but very much so practical and effective.
Know Their Playbook
Your credit score is a snapshot of the past but an indicator of how doing business with you in the future might look like. Auto lenders are only interested in the risks vs. rewards. Now I have purposely not used the terms "car dealer" or "auto dealership" for a reason. I wanted you to begin to separate the idea between lender and dealer. Your local car dealerships do not lend money, nor do they have any to lend you! (I am sure they would if they could) The dealerships are simply a middle man, they hold car inventory and have all the local resources necessary to sell the vehicles and negotiate the terms and conditions of the loan between the lender and yourself. Here are some useful tips for you to consider so that you are not easily taken advantage of while working with the bad credit auto dealers in your area. Check them out:
Shady Tactics - You should never be required to buy an extended service or warranty agreement. Dealers like to pull this little sneaky trick because it puts profit directly into their pockets. This is where my above rants on the differences between dealers and lenders come in to play. Dealers make their money on the differences between what they owe the car manufacture and what they sold it to you for. (They also get bonuses for meeting monthly, quarterly and annual volume goals). This shady tactic is simply about leveraging your desperation and squeezing extra profit from you in a time of need. Luckily the ease and access to quality information comes full circle, because you are here to increase your knowledge and hopefully that will bring you one step closer to a new or used car loan.
Know Your Score - This is as simple as it gets. This is not a step you should ever skip. You should absolutely know your score before you even step into a dealership. Bad credit loans typically come with high interest rates and sometimes require larger down payments. Dealers cannot really adjust or play with that fixed interest rate because that comes directly from the bank. However they routinely lie about how much of a down payment is required to secure your new loan. The lender could request a $2500 down payment but the dealership would tell you that a $5000 down payment is required. Again their intent is to pocket the extra $2500 as profit. They normally can squeeze this extra cash out of you by simply lying about the credit score that came back and scaring you into thinking that $5000 was required by the bank to get the loan done. Like I said "Know Your Score!". Enough said.
Total Price Is KING - If you have bad or damaged credit it is probably for this simple reason: At some point you owed more money than you had to pay out and things got ugly. Well typically this type of history follows behind a shortage of cash or inadequate monthly income sources. In turn you simply begin to manage and think about all financial decisions as a monthly payment. This is not inherently a bad practice however you must remember that your auto loan is going to come with a pretty hefty annual interest rate. This can blind you while you considering your needs for a new car. Monthly payment... Monthly payment..that's your typical mantra as you approach the dealership looking for a car. However this is the mantra of the salesperson as well. That's a problem and here is why: You should be interested in negotiating total price because that is the only way you are going to truly save some money. The dealer is interested in negotiating monthly payment because that keeps your attention away from the fact that they are not discounting the price of the car. It also keeps your attention away from the fact that your monthly payment will mainly be made up of your interest due and only a small part of your principal balance. So if you are even mildly interested in saving some money, which I know you are, then focus on the only area you can actually do so: Total price of the car, not the monthly payment.
Let's face it; its 2014 and the Internet provides the ability to access information from anywhere in the world has changed the way we all do business. This kind of access to information can be to your benefit or your demise! Your credit score is one of the most important forms of information that potential creditors want to access to qualify and rank you as a potential customer. These creditors are not the enemy. In fact they are our friends (at least we should pretend they are). They literally hold the keys to your new auto loan. Bad credit aside, the credit report tells the auto lender how much risk is involved with lending you their money.
Playing The Game
I am going to side bar for a second and talk about "Why you don't NEED the bad credit auto lenders money!" Well actually you do need their money to successfully finance your auto loan but there is a key difference I would like to point out. Simply do not "Act" as if you absolutely need their money, that is you have to play the game just as they do. Desperation is your worse enemy if you have bad credit and are in dire need of a new car. Lenders don't make money from lending you money and having you only pay back what you borrowed. They make money from interest on your car loan, and those interest rates can get pretty outrageous. Upwards of 20% depending on the lender, but can average around 15% for those with low credit scores. My point is that you must not give in to the first loan offer, you must NEGOTIATE! Lenders understand that you have probably been turned down multiple times (in fact they can absolutely tell from simply looking at your credit report) and now that you have been approved you will simply roll over at any loan terms they offer. Do not be afraid to let them know that you are interested but the interest rate is too high, or the total monthly payments are a bit much for you to sign for the loan that day. This tip is more mental but very much so practical and effective.
Know Their Playbook
Your credit score is a snapshot of the past but an indicator of how doing business with you in the future might look like. Auto lenders are only interested in the risks vs. rewards. Now I have purposely not used the terms "car dealer" or "auto dealership" for a reason. I wanted you to begin to separate the idea between lender and dealer. Your local car dealerships do not lend money, nor do they have any to lend you! (I am sure they would if they could) The dealerships are simply a middle man, they hold car inventory and have all the local resources necessary to sell the vehicles and negotiate the terms and conditions of the loan between the lender and yourself. Here are some useful tips for you to consider so that you are not easily taken advantage of while working with the bad credit auto dealers in your area. Check them out:
Shady Tactics - You should never be required to buy an extended service or warranty agreement. Dealers like to pull this little sneaky trick because it puts profit directly into their pockets. This is where my above rants on the differences between dealers and lenders come in to play. Dealers make their money on the differences between what they owe the car manufacture and what they sold it to you for. (They also get bonuses for meeting monthly, quarterly and annual volume goals). This shady tactic is simply about leveraging your desperation and squeezing extra profit from you in a time of need. Luckily the ease and access to quality information comes full circle, because you are here to increase your knowledge and hopefully that will bring you one step closer to a new or used car loan.
Know Your Score - This is as simple as it gets. This is not a step you should ever skip. You should absolutely know your score before you even step into a dealership. Bad credit loans typically come with high interest rates and sometimes require larger down payments. Dealers cannot really adjust or play with that fixed interest rate because that comes directly from the bank. However they routinely lie about how much of a down payment is required to secure your new loan. The lender could request a $2500 down payment but the dealership would tell you that a $5000 down payment is required. Again their intent is to pocket the extra $2500 as profit. They normally can squeeze this extra cash out of you by simply lying about the credit score that came back and scaring you into thinking that $5000 was required by the bank to get the loan done. Like I said "Know Your Score!". Enough said.
Total Price Is KING - If you have bad or damaged credit it is probably for this simple reason: At some point you owed more money than you had to pay out and things got ugly. Well typically this type of history follows behind a shortage of cash or inadequate monthly income sources. In turn you simply begin to manage and think about all financial decisions as a monthly payment. This is not inherently a bad practice however you must remember that your auto loan is going to come with a pretty hefty annual interest rate. This can blind you while you considering your needs for a new car. Monthly payment... Monthly payment..that's your typical mantra as you approach the dealership looking for a car. However this is the mantra of the salesperson as well. That's a problem and here is why: You should be interested in negotiating total price because that is the only way you are going to truly save some money. The dealer is interested in negotiating monthly payment because that keeps your attention away from the fact that they are not discounting the price of the car. It also keeps your attention away from the fact that your monthly payment will mainly be made up of your interest due and only a small part of your principal balance. So if you are even mildly interested in saving some money, which I know you are, then focus on the only area you can actually do so: Total price of the car, not the monthly payment.
Thursday, January 1, 2015
The Economy U.S. in 2015
How has it been that with all the billions of dollars per month that the Fed has injected into the money supply, how come the economy has not responded? Even though the Fed had tapered their money stimulus, the Fed's balance sheet has increased to over 4 trillion dollars up from a half of a trillion just a few years ago. So if the Fed has supplied the economy with essentially 4 trillion dollars, where is the money?
Following the money trail the Fed prints the money out of thin air and then lends it to the U.S. Treasury. Then the U.S. Treasury supplies the banks with this money at close to zero interest rates. So at this point the Banks have the stimulus money. This money was put into circulation to help the economy grow through lending for homes, business, etc. But most of the homes today were purchased with cash. Corporations are sitting on a record amount of cash. They have done this because they do not want to repatriate it and pay the tax on it.
Loans are not being made because of lending policies. corporations are not needing the money for expansion. What they are borrowing money for is to fund their operations because they would rather pay a low-interest rate of about 3% than repatriate the money they have overseas and pay 40% in tax. So at the end of the day, the money that was printed to fuel the economy has not been used for its intention.
The banks that have the stimulus money have invested it. They are paying almost nothing in interest and in turn investing it aggressively. This will be dangerous for the taxpayer because these banks are too large to fail and if or when the stock bubble pops the U. S. government will have to bail them out to keep a banking system alive. However this time this bubble is so large that it may ruin the economy as a whole and as a result collapse the "system" including the dollar.
If the banks are not going to use the money that was put into circulation for its intention. Then the U.S. government has a fiduciary responsibility to stop issuing bonds for the Fed to purchase. The system should realize that increasing the Fed's balance sheet that already has over 4 trillion dollars of treasury notes has to stop. When is when? If the economy has not been stimulated after trillions of dollars of stimulus, more is not the solution. If the money stimulus is the answer, force the banks to lend it or if they will not, then they must send it back to the U.S. government so that they can repay the federal loans.
Following the money trail the Fed prints the money out of thin air and then lends it to the U.S. Treasury. Then the U.S. Treasury supplies the banks with this money at close to zero interest rates. So at this point the Banks have the stimulus money. This money was put into circulation to help the economy grow through lending for homes, business, etc. But most of the homes today were purchased with cash. Corporations are sitting on a record amount of cash. They have done this because they do not want to repatriate it and pay the tax on it.
Loans are not being made because of lending policies. corporations are not needing the money for expansion. What they are borrowing money for is to fund their operations because they would rather pay a low-interest rate of about 3% than repatriate the money they have overseas and pay 40% in tax. So at the end of the day, the money that was printed to fuel the economy has not been used for its intention.
The banks that have the stimulus money have invested it. They are paying almost nothing in interest and in turn investing it aggressively. This will be dangerous for the taxpayer because these banks are too large to fail and if or when the stock bubble pops the U. S. government will have to bail them out to keep a banking system alive. However this time this bubble is so large that it may ruin the economy as a whole and as a result collapse the "system" including the dollar.
If the banks are not going to use the money that was put into circulation for its intention. Then the U.S. government has a fiduciary responsibility to stop issuing bonds for the Fed to purchase. The system should realize that increasing the Fed's balance sheet that already has over 4 trillion dollars of treasury notes has to stop. When is when? If the economy has not been stimulated after trillions of dollars of stimulus, more is not the solution. If the money stimulus is the answer, force the banks to lend it or if they will not, then they must send it back to the U.S. government so that they can repay the federal loans.
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